Monopolistic Competition and Supply-Side Cost Sharing in the Physician Services Market

Ake Blomqvist

UWO Department of Economics Working Papers from University of Western Ontario, Department of Economics

Abstract: The interaction of insurance and the market for physician services is considered in a model where imperfectly informed consumers rely on doctors for advice on the utilization of services and there is monopolistic competition among physicians on the basis of price and the quality of their advice. Equilibria under fee for service and capitation are compared, and I analyze the use of a system of capitation and partial supply-side cost sharing to attain an outcome superior to either pure fee for service or pure capitation.

Keywords: INSURANCE; MONOPOLIES; COMPETITION; HEALTH SERVICES; SUPPLY (search for similar items in EconPapers)
JEL-codes: I11 D43 D83 (search for similar items in EconPapers)
Date: 1997
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Persistent link: http://EconPapers.repec.org/RePEc:uwo:uwowop:9705

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Address: Department of Economics, Reference Centre, Social Science Centre, University of Western Ontario, London, Ontario, Canada N6A 5C2
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