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A comparison between two health care delivery systems using a spatial competition model approach

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  • Kiheiji Nishida
  • Atsushi Yoshida

Abstract

Regional mal-distribution of healthcare providers such as hospitals and clinics is conspicuous in Japan. This study analyses whether Japan’s fee-for-service reimbursement system (FFSRS) or its diagnosis procedure combination/per-diem payment system (DPC/PDPS) is the better solution for the problem, with reference to the Hotelling-style spatial competition model. Under FFSRS, we also consider two modes of competition: the Stackelberg case, in which providers can control the number of hospital visits, and the Nash case, in which providers cannot do so. Results indicate that competition under DPC/PDPS is the most intensive of the three modes of competition. To relieve the locational concentration of providers, we also find that DPC/PDPS has a better mechanism than FFSRS.

Suggested Citation

  • Kiheiji Nishida & Atsushi Yoshida, 2016. "A comparison between two health care delivery systems using a spatial competition model approach," Regional Studies, Regional Science, Taylor & Francis Journals, vol. 3(1), pages 337-354, January.
    • Handle: RePEc:taf:rsrsxx:v:3:y:2016:i:1:p:337-354
    DOI: 10.1080/21681376.2016.1209980
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