This paper discusses the efficiency and equity effects of priority care for
employees. Recent privatization of workers' compensation insurance in the
Netherlands caused an increasing tension between public responsibility for
health care cost-containment and private responsibility for sick pay. As a
result of strict supply side regulation, waiting lists increased, while at
the same time employers became fully responsible for sick pay. To reduce si
ck pay and production losses, employers are prepared to pay for priority ca
re by using available excess capacity. We argue that the criteria of Pareto
and Rawls can provide a rationale for the resulting differential treatment
of employees and non-employees. However, such a justification crucially de
pends on weights society assigns to absolute versus relative improvements i
n access to health care. Copyright (C) 1999 John Wiley & Sons, Ltd.