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Competition and Waiting Times in Hospital Markets

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  • Brekke, Kurt Richard
  • Siciliani, Luigi
  • Straume, Odd Rune

Abstract

This paper studies the impact of hospital competition on waiting times. We use a Salop-type model, with hospitals that differ in (geographical) location and, potentially, waiting time, and two types of patients; high-benefit patients who choose between neighbouring hospitals (competitive segment), and low-benefit patients who decide whether or not to demand treatment from the closest hospital (monopoly segment). Compared with a benchmark case of regulated monopolies, we find that hospital competition leads to longer waiting times in equilibrium if the competitive segment is sufficiently large. Given a policy regime of hospital competition, the effect of increased competition depends on the parameter of measurement: Lower travelling costs increase waiting times, higher hospital density reduces waiting times, while the effect of a larger competitive segment is ambiguous. We also show that, if the competitive segment is large, hospital competition is socially preferable to regulated monopolies only if the (regulated) treatment price is sufficiently high.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 6285.

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Date of creation: May 2007
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Handle: RePEc:cpr:ceprdp:6285

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Keywords: competition; hospitals; waiting times;

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References

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Citations

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Cited by:
  1. Brekke, Kurt Richard & Siciliani, Luigi & Straume, Odd Rune, 2007. "Competition and Waiting Times in Hospital Markets," CEPR Discussion Papers 6285, C.E.P.R. Discussion Papers.
  2. Dixon, Huw & Siciliani, Luigi, 2009. "Waiting-time targets in the healthcare sector: How long are we waiting?," Journal of Health Economics, Elsevier, vol. 28(6), pages 1081-1098, December.
  3. Kurt R. Brekke & Luigi Siciliani & Odd Rune Straume, 2008. "Hospital competition and quality with regulated prices," NIPE Working Papers 06/2008, NIPE - Universidade do Minho.
  4. Mario Pezzino, 2010. "Hospital competition when patients have different willingness to pay for quality," The School of Economics Discussion Paper Series 1014, Economics, The University of Manchester.
  5. Peter Sivey, 2012. "The effect of waiting time and distance on hospital choice for English cataract patients," Health Economics, John Wiley & Sons, Ltd., vol. 21(4), pages 444-456, 04.
  6. Namrata Gulati & Tridip Ray, 2011. "Inequality, neighbourhoods and welfare of the poor," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers 11-07, Indian Statistical Institute, New Delhi, India.
  7. Luigi Siciliani & Anderson Stanciole & Rowena Jacobs, 2008. "Do waiting times reduce hospital costs?," Discussion Papers 08/02, Department of Economics, University of York.
  8. Dewenter, Ralf & Jaschinski, Thomas & Kuchinke, Björn A., 2012. "Hospital market concentration and discrimination of patients," DICE Discussion Papers 63, Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
  9. Brekke, Kurt R. & Siciliani, Luigi & Straume, Odd Rune, 2012. "Hospital competition with soft budgets," Discussion Paper Series in Economics 6/2012, Department of Economics, Norwegian School of Economics.
  10. Simona Grassi & Ching‐To Albert Ma, 2012. "Public Sector Rationing and Private Sector Selection," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 14(1), pages 1-34, 02.
  11. Nathalie Chappe & Marie Obidzinski, 2013. "The impact of the number of courts on the demand for trials," Working Papers 2013-01, CRESE.
  12. Hugh Gravelle & Rita Santos & Luigi Siciliani & Rosalind Goudie, 2012. "Hospital Quality Competition Under Fixed Prices," Working Papers 080cherp, Centre for Health Economics, University of York.

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