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The Effects of Market Concentration and Excess Demand on the Price of Nursing Home Care

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  • Nyman, John A

Abstract

Certificate-of-need laws and construction moratoria are policies designed to control government expenditures by limiting the number of nursing home beds in an area. These policies also represent barriers to entry and can result in excess demand. This study investigates the effect of market concentration and excess demand on private prices for nursing home care. The author finds evidence that both factors are associated with higher prices. Because higher prices may cause private patients to exhaust their financial resources and become Medicaid patients sooner than they otherwise would, these policies may have had indirect cost-increasing consequences. Copyright 1994 by Blackwell Publishing Ltd.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Journal of Industrial Economics.

Volume (Year): 42 (1994)
Issue (Month): 2 (June)
Pages: 193-204

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Handle: RePEc:bla:jindec:v:42:y:1994:i:2:p:193-204

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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0022-1821

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Cited by:
  1. Forder, Julien & Allan, Stephen, 2014. "The impact of competition on quality and prices in the English care homes market," Journal of Health Economics, Elsevier, vol. 34(C), pages 73-83.
  2. Grabowski, David C. & Hirth, Richard A., 2003. "Competitive spillovers across non-profit and for-profit nursing homes," Journal of Health Economics, Elsevier, vol. 22(1), pages 1-22, January.
  3. Laurie Bates & Rexford Santerre, 2006. "Leviathan in the Crosshairs," Public Choice, Springer, vol. 127(1), pages 133-145, April.
  4. Grabowski, David C., 2001. "Medicaid reimbursement and the quality of nursing home care," Journal of Health Economics, Elsevier, vol. 20(4), pages 549-569, July.
  5. R. Tamara Konetzka, 2006. "Changing Economic Incentives in Long-Term Care," Center for Policy Research Policy Briefs 32, Center for Policy Research, Maxwell School, Syracuse University.
  6. Forder, Julien, 2000. "Mental health: market power and governance," Journal of Health Economics, Elsevier, vol. 19(6), pages 877-905, November.
  7. Julien Forder & Ann Netten, 2000. "The price of placements in residential and nursing home care: the effects of contracts and competition," Health Economics, John Wiley & Sons, Ltd., vol. 9(7), pages 643-657.
  8. Thomas Bauer & Magdalena Stroka, 2013. "Female labour supply and nursing home prices," Health Care Management Science, Springer, vol. 16(3), pages 258-270, September.
  9. Rexford E. Santerre & John A. Vernon, 2005. "Testing for Ownership Mix Efficiency: The Case of the Nursing Home Industry," NBER Working Papers 11115, National Bureau of Economic Research, Inc.
  10. Dwayne Banks & Elliott Parker & Jeanne Wendel, 2001. "Strategic interaction among hospitals and nursing facilities: the efficiency effects of payment systems and vertical integration," Health Economics, John Wiley & Sons, Ltd., vol. 10(2), pages 119-134.

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