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Imperfect Quality Information in a Quality-Competitive Hospital Market

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Author Info

  • Hugh Gravelle

    (National Primary Care Research and Development Centre, Centre for Health Economics, University of York)

  • Peter Sivey

    ()
    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

Abstract

We examine the implications of policies to improve information about the qualities of profit seeking duopoly hospitals which face the same regulated price and compete on quality. We show that if the hospital costs of quality are similar then better information increases the quality of both hospitals. However if the costs are sufficiently different improved information will reduce the quality of both hospitals.

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Bibliographic Info

Paper provided by Melbourne Institute of Applied Economic and Social Research, The University of Melbourne in its series Melbourne Institute Working Paper Series with number wp2009n05.

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Length: 30 pages
Date of creation: Mar 2009
Date of revision:
Handle: RePEc:iae:iaewps:wp2009n05

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Postal: Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, Victoria 3010 Australia
Phone: +61 3 8344 2100
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Web page: http://www.melbourneinstitute.com/
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  1. David M. Cutler & Robert S. Huckman & Mary Beth Landrum, 2004. "The Role of Information in Medical Markets: An Analysis of Publicly Reported Outcomes in Cardiac Surgery," NBER Working Papers 10489, National Bureau of Economic Research, Inc.
  2. Marcello Montefiori, 2005. "Spatial competition for quality in the market for hospital care," The European Journal of Health Economics, Springer, vol. 6(2), pages 131-135, June.
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Cited by:
  1. Hugh Gravelle & Rita Santos & Luigi Siciliani, 2013. "Does a hospitals quality depend on the quality of other hospitals? A spatial econometrics approach to investigating hospital quality competition," Working Papers 082cherp, Centre for Health Economics, University of York.
  2. Chou, Shin-Yi & Deily, Mary E. & Li, Suhui & Lu, Yi, 2014. "Competition and the impact of online hospital report cards," Journal of Health Economics, Elsevier, vol. 34(C), pages 42-58.
  3. Gravelle, Hugh & Sivey, Peter, 2010. "Imperfect information in a quality-competitive hospital market," Journal of Health Economics, Elsevier, vol. 29(4), pages 524-535, July.
  4. 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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