The Market for Nursing Homes in Germany: a spatial competition approach

Ulrich Hange ()

VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy from Verein für Socialpolitik / German Economic Association

Abstract: The German nursing home industry rapidly grows due to the permanent increase of people in need of long-term care, in particular. At the same time a large share of residents in German nursing homes is in need of social assistance. In a simple spatial competition model we show that the presence of people in need of social assistance increases prices of nursing homes. Bargaining between nursing homes and long-term care insurance companies and social assistance administration can restrain this price-enhancing effect. In addition, price negotiation may help to reach a social optimal number of nursing homes. Thus, our analysis also presents a rationale in favor of negotiations in nursing home markets from a welfare point of view.

JEL-codes: H53 I11 I38 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-com and nep-hea
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc15:112853

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