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Insurance and monopoly power in a mixed private/public hospital system, CHERE Discussion Paper No 55

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Author Info
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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Paper provided by CHERE, University of Technology, Sydney in its series Discussion Papers with number 55.

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Date of creation: Dec 2004
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Handle: RePEc:her:chedps:55

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Related research
Keywords: Physician payments

Find related papers by JEL classification:
I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets

This paper has been announced in the following NEP Reports:

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  1. Martin Gaynor & Deborah Haas-Wilson & William B. Vogt, 2000. "Are Invisible Hands Good Hands? Moral Hazard, Competition, and the Second-Best in Health Care Markets," Journal of Political Economy, University of Chicago Press, vol. 108(5), pages 992-1005, October. [Downloadable!] (restricted)
    Other versions:
  2. Chiu, W. Henry, 1997. "Health insurance and the welfare of health care consumers," Journal of Public Economics, Elsevier, vol. 64(1), pages 125-133, April. [Downloadable!] (restricted)
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