Hospital Competition and Quality with Regulated Prices

Kurt R. Brekke (), Luigi Siciliani () and Odd Rune Straume ()

No CESifo Working Paper No. 2635, CESifo Working Paper Series from CESifo Group Munich

Abstract: We analyse the effect of competition on quality in hospital markets with regulated prices, considering both the effect of (i) introducing competition (monopoly versus competition) and (ii) increasing competition through lower transportation costs (increased substitutability) or a higher number of hospitals. With semi-altruistic providers and a fairly general cost structure, we show that the relationship between competition and quality is generally ambiguous. In contrast to the received theoretical literature, this is consistent with, and potentially explains, the mixed empirical evidence.

Keywords: hospitals; competition; quality (search for similar items in EconPapers)
JEL-codes: H42 I11 I18 L13 (search for similar items in EconPapers)
Date: 2009
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Working Paper: Hospital competition and quality with regulated prices (2008)
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