Optimal Co-Payment Policy In Health Care: Competition, Ownership Structure And Quality Provision

Rune Stenbacka and Mihkel Tombak

No 140004, Working Papers from Canadian Centre for Health Economics

Abstract: We analytically characterize the effects of ownership and competition in the health care industry on quality provision, market coverage and optimal co-payment policy. A private monopoly selects a lower quality than a public supplier, and the socially optimal co-payment rate with a private monopoly exceeds that with a public monopoly. We establish that the optimal co-payment policy is invariant to the introduction of private competition. Thus, market coverage is invariant to the introduction of competition, whereas all consumers with a higher willingness to pay for quality are better off with competition.

Keywords: Public vs private health care provision; competition in health care; health care quality; quality differentiation; mixed duopoly (search for similar items in EconPapers)
JEL-codes: I11 I18 L10 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2014-03
New Economics Papers: this item is included in nep-com and nep-hea
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Published Online, March 2014

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Persistent link: https://EconPapers.repec.org/RePEc:cch:wpaper:140004

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