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Hospital interdependence in a competitive institutional environment: Evidence from Italy

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  • Lisi, D.; Moscone, F.; Tosetti, E.; Vinciotti, V.;

Abstract

In this paper we study the impact of competition on hospital adverse health outcomes, using data on patients admitted to hospitals located in the Lombardy region in Italy between 2004 and 2013. We propose an economic framework that incorporates both short and long range forms of competition among hospitals. In a set up where prices are regulated, and under the assumption that hospitals are profit maximisers, hospital managers compete locally in quality to attract more patients. At the same time, managers have an incentive to compete with all other hospitals within the Lombardy region as their relative quality performance will potentially affect their future states. Our empirical model exploits methods from the graphical modelling literature to estimate local rivals, as well as the degree of local and global interdependence among hospitals. Our results show a significant positive degree of short and long range dependence, which suggests the existence of forms of local and global competition among hospitals with relevant implications for the healthcare policy.

Suggested Citation

  • Lisi, D.; Moscone, F.; Tosetti, E.; Vinciotti, V.;, 2017. "Hospital interdependence in a competitive institutional environment: Evidence from Italy," Health, Econometrics and Data Group (HEDG) Working Papers 17/07, HEDG, c/o Department of Economics, University of York.
  • Handle: RePEc:yor:hectdg:17/07
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    Cited by:

    1. Domenico Lisi & Luigi Siciliani & Odd Rune Straume, 2018. "Hospital Competition under Pay-for-Performance: Quality, Mortality and Readmissions," Discussion Papers 18/03, Department of Economics, University of York.

    More about this item

    Keywords

    hospital interdependence; stochastic games; graphical modelling; spatial econometrics;

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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