Donald J Wright () (Department of Economics, University of Sydney)
Abstract
Consumers, when ill, often have the choice of being treated for free in a public hospital or at a positive price in a private hospital. To compensate for the positive price, private hospitals offer a higher quality treatment. Private hospitals and doctors also have a degree of monopoly power in their pricing. In this setting, it is shown that the presence of insurance does not affect the number of consumers treated in the private hospital, rather the private hospital and the doctor respond to the presence of insurance by increasing the prices they charge and the quality of the private hospital experience.
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Publisher Info
Paper provided by CHERE, University of Technology, Sydney in its series Discussion Papers with number
55.
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