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Hospital Market Structure and Cost Performance: A Case Study


  • Rexford E. Santerre

    (Bentley College)

  • Dana C. Bennett

    (Bentley College)


Prior research on the nonprice theory of hospital competition uses data prior to the mid-1980s when third party payers were insensitive to hospital prices. Moreover, existing studies fail to test this theory for the different types of hospital ownership. In response to these issues, this research employs a more current data set and examines this theory for three distinct samples of nonprice theory of hospital competition only for nonprofit institutions. Conversely, costs for public and for-profit hospitals are found to be unaffected by market structure.

Suggested Citation

  • Rexford E. Santerre & Dana C. Bennett, 1992. "Hospital Market Structure and Cost Performance: A Case Study," Eastern Economic Journal, Eastern Economic Association, vol. 18(2), pages 209-219, Spring.
  • Handle: RePEc:eej:eeconj:v:18:y:1992:i:2:p:209-219

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    References listed on IDEAS

    1. Robinson, James C. & Luft, Harold S., 1985. "The impact of hospital market structure on patient volume, average length of stay, and the cost of care," Journal of Health Economics, Elsevier, vol. 4(4), pages 333-356, December.
    2. David S. Salkever & Donald M. Steinwachs & Agnes Rupp, 1985. "Hospital Cost and Efficiency Under Per Service and Per Case Payment in Maryland: A Tale of the Carrot and the Stick," NBER Working Papers 1633, National Bureau of Economic Research, Inc.
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    More about this item


    Hospital; Hospitals; Market Structure;

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms


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