A microsimulation model of the health care system: the role of the hospital sector

A microeconometric model of the health care system of the United States was estimated by applying econometric techniques to extensive data. The model treats the microanalytic behavior of individuals and institutions comprising the health care system, and is structured in terms of five submodels pertaining to consumers, hospital and physician services, physician and nonphysician manpower. In each submodel there is an economic market on which demands and supplies from the individuals and institutions interact and on which the allocation of resources is determined. A detailed treatment of participant attributes facilitates study of the distributional impacts of alternative policies. This paper presents an overview of the complete system, and summarizes the relationships used for the hospital sector.