Hospital Competition under Regulated Prices: Application to Urban Health Sector Reforms in China
We develop a model of public-private hospital competition un- der regulated prices, recognizing that hospitals are multi-service Þrms and that equilibria depend on the interactions of patients, hospital administrators, and physicians. We then use data from China to calibrate a simulation model of the impact of China?s recent payment and organizational reforms on cost, quality and access. Both the analytic and simulation results show how provid- ing implicit insurance through distorted prices leads to over/under use of services by proÞtability, which in turn fuels cost escalation and reduces access for those who cannot a?ord to self-pay for care. Hospital competition for patients will improve social welfare only if policymakers pay careful attention to payment incentives and regulation.
|Date of creation:||2004|
|Date of revision:|
|Contact details of provider:|| Postal: Medford, MA 02155, USA|
Phone: (617) 627-3560
Fax: (617) 627-3917
Web page: http://ase.tufts.edu/economics
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Joseph P. Newhouse, 2004. "Pricing the Priceless: A Health Care Conundrum," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262640589, December.
- Liu, Yuanli, 2002. "Reforming China's urban health insurance system," Health Policy, Elsevier, vol. 60(2), pages 133-150, May.
- McGuire, Thomas G., 2000. "Physician agency," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 9, pages 461-536 Elsevier.
- Oliver Hart & Andrei Shleifer & Robert Vishny, 1996.
"The Proper Scope of Government: Theory and an Application to Prisons,"
Harvard Institute of Economic Research Working Papers
1778, Harvard - Institute of Economic Research.
- Oliver Hart & Andrei Shleifer & Robert W. Vishny, 1997. "The Proper Scope of Government: Theory and an Application to Prisons," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1127-1161.
- Oliver Hart & Andrei Shleifer & Robert W. Vishny, 1996. "The Proper Scope of Government: Theory and an Application to Prisons," NBER Working Papers 5744, National Bureau of Economic Research, Inc.
- Winnie Yip & Karen Eggleston, 2001. "Provider payment reform in China: the case of hospital reimbursement in Hainan province," Health Economics, John Wiley & Sons, Ltd., vol. 10(4), pages 325-339.
- Ching-to Albert Ma, 1994.
"Health Care Payment Systems: Cost and Quality Incentives,"
0047, Boston University - Industry Studies Programme.
- Ma, Ching-to Albert, 1994. "Health Care Payment Systems: Cost and Quality Incentives," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 3(1), pages 93-112, Spring.
- Abhijit V. Banerjee, 1997. "A Theory of Misgovernance," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1289-1332.
- Mark Duggan, 2000.
"Hospital Ownership and Public Medical Spending,"
NBER Working Papers
7789, National Bureau of Economic Research, Inc.
- Richard G. Frank & Jacob Glazer & Thomas G. McGuire, 1998.
"Measuring Adverse Selection in Managed Health Care,"
NBER Working Papers
6825, National Bureau of Economic Research, Inc.
- Frank, Richard G. & Glazer, Jacob & McGuire, Thomas G., 2000. "Measuring adverse selection in managed health care," Journal of Health Economics, Elsevier, vol. 19(6), pages 829-854, November.
- Keeler, Emmett B. & Carter, Grace & Newhouse, Joseph P., 1998. "A model of the impact of reimbursement schemes on health plan choice," Journal of Health Economics, Elsevier, vol. 17(3), pages 297-320, June.
- Henderson, Gail & Shuigao, Jin & Akin, John & Zhiming, Li & Jianmin, Wang & Haijiang, Ma & Yunan, He & Xiping, Zhang & Ying, Chang & Keyou, Ge, 1995. "Distribution of medical insurance in China," Social Science & Medicine, Elsevier, vol. 41(8), pages 1119-1130, October.
- Pedro P. Barras & Xavier Martinez-Giralt, .
"Public And Private Provision Of Healtch Care,"
UFAE and IAE Working Papers
438.99, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- S. Baranzoni & P. Bianchi & L. Lambertini, 2000. "Multiproduct Firms, Product Differentiation, and Market Structure," Working Papers 368, Dipartimento Scienze Economiche, Universita' di Bologna.
- Liu, Yuanli & Hsiao, William C. & Eggleston, Karen, 1999. "Equity in health and health care: the Chinese experience," Social Science & Medicine, Elsevier, vol. 49(10), pages 1349-1356, November.
- Banerjee, A.V., 1997. "A Theory of Misgovernance," Working papers 97-4, Massachusetts Institute of Technology (MIT), Department of Economics.
- Fleisher, Belton M. & Wang, Xiaojun, 2001. "Efficiency Wages and Work Incentives in Urban and Rural China," Journal of Comparative Economics, Elsevier, vol. 29(4), pages 645-662, December.
- Hsiao, William C. L., 1995. "The Chinese health care system: Lessons for other nations," Social Science & Medicine, Elsevier, vol. 41(8), pages 1047-1055, October.
- Sloan, Frank A., 2000. "Not-for-profit ownership and hospital behavior," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 21, pages 1141-1174 Elsevier.
When requesting a correction, please mention this item's handle: RePEc:tuf:tuftec:0401. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Caroline Kalogeropoulos)
If references are entirely missing, you can add them using this form.