 Hospital competition when patients learn through experienceLuís Sá and Odd Rune Straume Journal of Health Economics, 2024, vol. 97, issue C Abstract: We study competing hospitals’ incentives for quality provision in a dynamic setting where healthcare is an experience good. In our model, the utility a patient derives from choosing a particular provider depends on a subjective component specific to the match between the patient and the provider, which can only be learned through experience. We find that the experience-good nature of healthcare can either reinforce or dampen the demand responsiveness to quality and the hospitals’ incentives for quality provision, depending on two key factors: the shape of the distribution of match-specific utilities and the cost relationship between quality provision and treatment volume. We establish conditions under which ignoring the experience dimension of healthcare leads to inaccurate assessments of the competitiveness of hospital markets. Keywords: Hospital competition; Experience goods; Patient experience; Learning-by-doing; Quality (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jhecon:v:97:y:2024:i:c:s0167629624000651 DOI: 10.1016/j.jhealeco.2024.102920 Access Statistics for this article Journal of Health Economics is currently edited by J. P. Newhouse, A. J. Culyer, R. Frank, K. Claxton and T. McGuire More articles in Journal of Health Economics from Elsevier |
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