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Patient Mobility, Health Care Quality and Welfare

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  • Kurt R. Brekke
  • Rosella Levaggi
  • Luigi Siciliani
  • Odd Rune Straume

Abstract

Patient mobility is a key issue in the EU who recently passed a new law on patients’ right to EU-wide provider choice. In this paper we use a Hotelling model with two regions that differ in technology to study the impact of patient mobility on health care quality, health care financing and welfare. We show that without patient mobility quality is too low (high) and too few (many) patients are treated in the high-skill (low-skill) region. The effects of patient mobility depend on the transfer payment. If the payment is below marginal cost, mobility leads to a ‘race-to-the-bottom’ in quality and lower welfare in both regions. If the payment is equal to marginal cost, quality and welfare remain unchanged in the high-skill region, but the low-skill region benefits. For a socially optimal payment, which is higher than marginal cost, quality levels in the two regions are closer to (but not at) the first best, but welfare is lower in the low-skill region. Thus, patient mobility can have adverse effects on quality provision and welfare unless an appropriate transfer payment scheme is implemented.

Suggested Citation

  • Kurt R. Brekke & Rosella Levaggi & Luigi Siciliani & Odd Rune Straume, 2014. "Patient Mobility, Health Care Quality and Welfare," CESifo Working Paper Series 4576, CESifo.
  • Handle: RePEc:ces:ceswps:_4576
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    References listed on IDEAS

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    Cited by:

    1. Paolo Berta & Gianmaria Martini & Daniele Spinelli & Giorgio Vittadini, 2022. "The beaten paths effect on patient inter‐regional mobility: An application to the Italian NHS," Papers in Regional Science, Wiley Blackwell, vol. 101(4), pages 945-977, August.
    2. Brekke, Kurt R. & Levaggi, Rosella & Siciliani, Luigi & Straume, Odd Rune, 2016. "Patient mobility and health care quality when regions and patients differ in income," Journal of Health Economics, Elsevier, vol. 50(C), pages 372-387.
    3. Besley, Tim & Malcomson, James M, 2016. "Choice and Competition in Public Service Provision," CEPR Discussion Papers 11441, C.E.P.R. Discussion Papers.
    4. Mathias Kifmann & Luigi Siciliani, 2017. "Average‐Cost Pricing and Dynamic Selection Incentives in the Hospital Sector," Health Economics, John Wiley & Sons, Ltd., vol. 26(12), pages 1566-1582, December.
    5. Berta, Paolo & Guerriero, Carla & Levaggi, Rosella, 2021. "Hospitals’ strategic behaviours and patient mobility: Evidence from Italy," Socio-Economic Planning Sciences, Elsevier, vol. 77(C).
    6. Besley, Timothy & Malcomson, James M., 2018. "Competition in public service provision: The role of not-for-profit providers," Journal of Public Economics, Elsevier, vol. 162(C), pages 158-172.
    7. Alexander Karpov, 2016. "Health care inequality, patient mobility and welfare," Economics Bulletin, AccessEcon, vol. 36(2), pages 1000-1009.
    8. Andritsos, Dimitrios A. & Tang, Christopher S., 2014. "Introducing competition in healthcare services: The role of private care and increased patient mobility," European Journal of Operational Research, Elsevier, vol. 234(3), pages 898-909.
    9. Li, Zhong-Ping & Wang, Jian-Jun, 2021. "Effects of healthcare quality and reimbursement rate in a hospital association," Socio-Economic Planning Sciences, Elsevier, vol. 76(C).
    10. S. Balia & R. Brau & E. Marrocu, 2014. "Free patient mobility is not a free lunch. Lessons from a decentralised NHS," Working Paper CRENoS 201409, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    11. repec:nip:nipewp:09/2015 is not listed on IDEAS
    12. Michele Bisceglia & Roberto Cellini & Luca Grilli, 2019. "Quality Competition in Healthcare Services with Regional Regulators: A Differential Game Approach," Dynamic Games and Applications, Springer, vol. 9(1), pages 1-23, March.
    13. Michele Bisceglia & Roberto Cellini & Luca Grilli, 2018. "Regional regulators in health care service under quality competition: A game theoretical model," Health Economics, John Wiley & Sons, Ltd., vol. 27(11), pages 1821-1842, November.
    14. Donald J. Wright, 2013. "An Equilibrium Model of General Practitioner Payment Schemes," The Economic Record, The Economic Society of Australia, vol. 89(286), pages 287-299, September.
    15. Paolo Berta & Carla Guerriero & Rosella Levaggi, 2018. "The dark side of fiscal federalism:evidence from hospital care in Italy," Working papers 72, Società Italiana di Economia Pubblica.
    16. Emanuela Marrocu & Silvia Balia & Rinaldo Brau, 2016. "A spatial analysis of inter-regional patient mobility in Italy," ERSA conference papers ersa16p127, European Regional Science Association.

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    More about this item

    Keywords

    patient mobility; health care quality; regional and global welfare;
    All these keywords.

    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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