Patient mobility and health care quality when regions and patients differ in income

Kurt Brekke (), Rosella Levaggi, Luigi Siciliani and Odd Rune Straume

Journal of Health Economics, 2016, vol. 50, issue C, 372-387

Abstract: We study the effects of cross-border patient mobility on health care quality and welfare when income varies across and within regions. We use a Salop model with a high-, middle-, and low-income region. In each region, a policy maker chooses health care quality to maximise the utility of its residents when health care costs are financed by general income taxation. In equilibrium, regions with higher income offer better quality, which creates an incentive for patient mobility from lower- to higher-income regions. Assuming a prospective payment scheme based on DRG-pricing, we find that lower non-monetary (administrative) mobility costs have (i) no effect on quality or welfare in the high-income region; (ii) a negative effect on quality but a positive effect on welfare for the middle-income region; and (iii) ambiguous effects on quality and welfare for the low-income region. Lower monetary mobility costs (copayments) might reduce welfare in both the middle- and low-income region. Thus, health policies that stimulate cross-border patient mobility can be counterproductive when regions differ in income.

Keywords: Patient mobility; Health care quality; Income inequalities; Regional welfare; Salop model (search for similar items in EconPapers)
JEL-codes: H51 H73 I11 I18 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

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Working Paper: Patient mobility and health care quality when regions and patients differ in income (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhecon:v:50:y:2016:i:c:p:372-387

DOI: 10.1016/j.jhealeco.2016.05.003

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