Competition among Hospitals
Martin Gaynor () and
William Vogt ()
RAND Journal of Economics, 2003, vol. 34, issue 4, 764-85
We examine competition in the hospital industry, in particular the effect of ownership type (for-profit, not-for-profit, government). We estimate a structural model of demand and pricing in the hospital industry in California, then use the estimates to simulate the effect of a merger. California hospitals in 1995 face an average price elasticity of demand of -4.85. Not-for-profit hospitals face less elastic demand and act as if they have lower marginal costs. Their prices are lower than those of for-profits, but markups are higher. We simulate the effects of the 1997 merger of two hospital chains. In San Luis Obispo County, where the merger creates a near monopoly, prices rise by up to 53%, and the predicted price increase would not be substantially smaller were the chains not-for-profit. Copyright 2003 by the RAND Corporation.
References: Add references at CitEc
Citations View citations in EconPapers (84) Track citations by RSS feed
There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.
Working Paper: Competition among Hospitals (2003)
Working Paper: Competition Among Hospitals (2003)
Working Paper: Competition Among Hospitals (2002)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:rje:randje:v:34:y:2003:i:4:p:764-85
Ordering information: This journal article can be ordered from
https://editorialexp ... i-bin/rje_online.cgi
Access Statistics for this article
More articles in RAND Journal of Economics from The RAND Corporation
Bibliographic data for series maintained by ().