Insurance and monopoly power in a mixed private/public hospital system, CHERE Discussion Paper No 55

Donald J Wright ()

Discussion Papers from CHERE, University of Technology, Sydney

Abstract: Consumers, when ill, often have the choice of being treated for free in a public hospital or at a positive price in a private hospital. To compensate for the positive price, private hospitals offer a higher quality treatment. Private hospitals and doctors also have a degree of monopoly power in their pricing. In this setting, it is shown that the presence of insurance does not affect the number of consumers treated in the private hospital, rather the private hospital and the doctor respond to the presence of insurance by increasing the prices they charge and the quality of the private hospital experience.

Keywords: Physician; payments (search for similar items in EconPapers)
JEL-codes: I11 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-hea and nep-ias
Date: 2004-12
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