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The Market for Nursing Homes in Germany: a spatial competition approach

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  • Hange, Ulrich

Abstract

The German nursing home industry rapidly grows due to the permanent increase of people in need of long-term care, in particular. At the same time a large share of residents in German nursing homes is in need of social assistance. In a simple spatial competition model we show that the presence of people in need of social assistance increases prices of nursing homes. Bargaining between nursing homes and long-term care insurance companies and social assistance administration can restrain this price-enhancing effect. In addition, price negotiation may help to reach a social optimal number of nursing homes. Thus, our analysis also presents a rationale in favor of negotiations in nursing home markets from a welfare point of view.

Suggested Citation

  • Hange, Ulrich, 2015. "The Market for Nursing Homes in Germany: a spatial competition approach," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112853, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc15:112853
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    More about this item

    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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