Does price deregulation in a competitive hospital market damage quality?

Anne-Fleur Roos, O’Donnell, Owen, Frederik T. Schut, Eddy Van Doorslaer, Raf Van Gestel and Marco Varkevisser
Authors registered in the RePEc Author Service: Owen O'Donnell

Journal of Health Economics, 2020, vol. 72, issue C

Abstract: Regulators may be hesitant to permit price competition in healthcare markets because of its potential to damage quality. We assess whether this fear is well founded by examining a reform that permitted Dutch health insurers to freely negotiate prices with hospitals. Unlike previous research on hospital competition that has relied on quality indicators for urgent treatments, we take advantage of a plausible absence of selection bias to identify the effect on the quality of elective procedures that should be more price responsive. Using data on all admissions for hip replacements to Dutch hospitals and a difference-in-differences comparison between more and less concentrated markets, we find no evidence that price deregulation in a competitive environment reduces quality measured by hip replacement readmission rates.

Keywords: Healthcare; Hospital; Competition; Quality; Contracting (search for similar items in EconPapers)
JEL-codes: I11 L14 L15 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhecon:v:72:y:2020:i:c:s0167629618303539

DOI: 10.1016/j.jhealeco.2020.102328

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