Hospital Cost Function In A Non-Market Health Care System

Daniel Bilodeau, Pierre-Yves Cremieux () and Pierre Ouellette

The Review of Economics and Statistics, 2000, vol. 82, issue 3, 489-498

Abstract: This paper examines whether a competitive model of the firm appropriately describes the behavior of hospitals in a non-market environment. This test is based on the best database yet available in the hospital sector. We show that properties of the non-market hospitals'cost functions are compatible with short-term, but not long-term, cost-minimizing behavior. This is consistent with results of similar analyses in the U.S. hospital market and suggests that Québec hospitals, which operate in a non-market environment, might not behave fundamentally differently from their U.S. counterparts. © 2000 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology

Date: 2000
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