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Spatial Competition Across Borders: The Role of Patients’ Mobility and Institutional Settings

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  • Laura Levaggi

    (Faculty of Engineering, Free University of Bolzano-Bozen, Via Buozzi 1, 39100 Bolzano-Bozen, Italy)

  • Rosella Levaggi

    (Department of Economics and Management, University of Brescia, Via S. Faustino, 74b, 25122 Brescia, Italy)

Abstract

Health care systems rely on geographical boundaries that secure financial stability and adequate planning. Quality differences across regions often arise for efficiency reasons, causing patient flows if mobility is free. In this paper, a theoretical spatial competition model is developed to study the role of patients’ mobility on quality setting and to draw policy implications on its use as an instrument to reduce disparities, in a setting where regions differ in efficiency, costs, and market structure. From the analysis, it emerges that the institutional setting matters and a trade-off may appear between equity (in terms of quality difference across patients) and welfare (finding an allocation that maximizes social benefits). In a centralized setting, it is optimal to regulate mobility and increase the quality gap, while allowing free mobility calls for a refined quality setting, in which, depending on a balance between costs and benefits, the quality gap may be either increased or decreased. In decentralization the gap is generally lower, compared to centralization: the different consideration of benefits from local quality provision results in higher quality levels where the market structure is vertically integrated.

Suggested Citation

  • Laura Levaggi & Rosella Levaggi, 2025. "Spatial Competition Across Borders: The Role of Patients’ Mobility and Institutional Settings," Games, MDPI, vol. 16(3), pages 1-20, June.
    • Handle: RePEc:gam:jgames:v:16:y:2025:i:3:p:31-:d:1672492
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    References listed on IDEAS

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    1. Michele Bisceglia & Roberto Cellini & Luca Grilli, 2018. "Regional regulators in health care service under quality competition: A game theoretical model," Health Economics, John Wiley & Sons, Ltd., vol. 27(11), pages 1821-1842, November.
    2. Claudia Finotelli, 2021. "Cross‐border Healthcare in the EU: Welfare Burden or Market Opportunity? Evidence from the Spanish Experience," Journal of Common Market Studies, Wiley Blackwell, vol. 59(3), pages 608-624, May.
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