Hospital competition and quality with regulated prices

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Hospital competition and quality with regulated prices

Author Info

Kurt R. Brekke () (Department of Economics, Norwegian School of Economics and Business Administration, and Health Economics Bergen)
Luigi Siciliani () (Department of Economics and Related Studies, and Centre for Health Economics, University of York)
Odd Rune Straume () (Universidade do Minho - NIPE)

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Abstract

We analyse the effect of competition on quality in hospital market with regulated prices, considering both the effect of free patient choice (monopoly versus competition) and increased competition through lower transportation costs (increased substitutability). With partially altruistic providers and a convex cost function that is non-separable in activity and quality, we show - in both cases - that the effect is generally ambiguous. In contrast to the received theoretical literature, this is consistent with, and potentially explains, the mixed empirical evidence.

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Publisher Info
Paper provided by NIPE - Universidade do Minho in its series NIPE Working Papers with number 06/2008.

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Date of creation: 2008
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Handle: RePEc:nip:nipewp:06/2008

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Find related papers by JEL classification:
H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

This paper has been announced in the following NEP Reports:

NEP-ALL-2008-03-01 (All new papers)
NEP-COM-2008-03-01 (Industrial Competition)
NEP-HEA-2008-03-01 (Health Economics)
NEP-MIC-2008-03-01 (Microeconomics)
NEP-URE-2008-03-01 (Urban & Real Estate Economics)

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This page was last updated on 2008-9-5.

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