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A two-sector model of healthcare provision with directed search

Author

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  • Karine Lamiraud

    (ESSEC Business School and THEMA (UMR 8184) - ESSEC Business School - THEMA - Théorie économique, modélisation et applications - CNRS - Centre National de la Recherche Scientifique - CY - CY Cergy Paris Université)

  • Radu Vranceanu

    (ESSEC Business School and THEMA (UMR 8184) - ESSEC Business School - THEMA - Théorie économique, modélisation et applications - CNRS - Centre National de la Recherche Scientifique - CY - CY Cergy Paris Université)

Abstract

In France, specialist physicians providing outpatient care work either in sector 1, where fees are regulated, or sector 2, where they set their own fees freely. Patients choose their physician based on fees, perceived quality of service and the likelihood of obtaining an appointment, directing their search toward either sector 1 or sector 2 providers. In equilibrium, significant patient and physician mobility across sectors means that policies affecting one sector have spillover effects on the other. We use comparative statics to analyze the consequences of various policies, such as increasing regulated fees or expanding private insurance coverage for sector 2 consultations. Both entail a positive response of the unregulated fee in sector 2. Some effects are counterintuitive and result from the reallocation of patients and physicians across sectors, which can deteriorate the effectiveness of the search process.

Suggested Citation

  • Karine Lamiraud & Radu Vranceanu, 2025. "A two-sector model of healthcare provision with directed search," Working Papers hal-05099289, HAL.
    • Handle: RePEc:hal:wpaper:hal-05099289
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