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Provider Competition in a Dynamic Setting

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Author Info
Marie Allard () (IEA, HEC Montréal)
Pierre Thomas Léger () (IEA, HEC Montréal)
Lise Rochaix

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Abstract

In this paper, we examine provider and patient behaviour where effort is non-contractible and where competition between providers is modeled in an explicit way. More specifically, we construct a model where physicians repeatedly compete for patients and where patients’ outside options are solved for in equilibrium. In our model, physicians are characterized by an individual-specific ethical constraint which allows for unobserved heterogeneity in the physicians market. By doing so, we introduce uncertainty in the patient’s likely treatment if he were in fact to leave his current physician to seek care elsewhere. We find that competition between providers may serve as an important incentive for physicians in treating their patients with desired levels of care.

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Publisher Info
Paper provided by HEC Montréal, Institut d'économie appliquée in its series Cahiers de recherche with number 04-07.

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Length: 32 pages
Date of creation: Aug 2004
Date of revision:
Handle: RePEc:iea:carech:0407

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Postal: Institut d'économie appliquée HEC Montréal 3000, Chemin de la Côte-Sainte-Catherine Montréal, Québec H3T 2A7
Phone: (514) 340-6463
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Web page: http://www2.hec.ca/iea/
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Postal: Institut d'économie appliquée HEC Montréal 3000, Chemin de la Côte-Sainte-Catherine Montréal, Québec H3T 2A7
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Related research
Keywords: Physician Payment Mechanisms; Physician heterogeneity; Competition; Information Asymmetry; Insurance.;

Find related papers by JEL classification:
I10 - Health, Education, and Welfare - - Health - - - General
I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Ching-to Albert Ma, 1994. "Health Care Payment Systems: Cost and Quality Incentives," Papers 0047, Boston University - Industry Studies Programme.
    Other versions:
  2. Danzon, Patricia M, 1991. "Liability for Medical Malpractice," Journal of Economic Perspectives, American Economic Association, vol. 5(3), pages 51-69, Summer. [Downloadable!] (restricted)
    Other versions:
  3. Gaynor, Martin & Vogt, William B., 2000. "Antitrust and competition in health care markets," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 27, pages 1405-1487 Elsevier. [Downloadable!] (restricted)
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  4. Blomqvist, Ake, 1991. "The doctor as double agent: Information asymmetry, health insurance, and medical care," Journal of Health Economics, Elsevier, vol. 10(4), pages 411-432. [Downloadable!] (restricted)
  5. Ma, Ching-to Albert & McGuire, Thomas G, 1997. "Optimal Health Insurance and Provider Payment," American Economic Review, American Economic Association, vol. 87(4), pages 685-704, September. [Downloadable!] (restricted)
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  6. Gal-Or, Esther, 1999. "Optimal Reimbursement and Malpractice Sharing Rules in Health Care Markets," Journal of Regulatory Economics, Springer, vol. 16(3), pages 237-65, November. [Downloadable!] (restricted)
  7. Ellis, Randall P., 1998. "Creaming, skimping and dumping: provider competition on the intensive and extensive margins1," Journal of Health Economics, Elsevier, vol. 17(5), pages 537-555, October. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Martin Gaynor, 2006. "What Do We Know About Competition and Quality in Health Care Markets?," NBER Working Papers 12301, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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