Who benefits when inertia is reduced? Competition, quality and returns to skill in health care markets

Sebastian Fleitas

No 14292, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Increased competition creates incentives for health-care providers to improve quality by incorporating better inputs, like higher-skill physicians. However, because the supply of high-skill physicians is relatively inelastic in the short run, increases in competition may lead only to increases in returns to skill. I leverage a reform in Uruguay that increased competition among completely vertically integrated providers by reducing lock-in of consumers. Using administrative data on wages and hours and a measure of physicians’ skills based on test scores from medical school, I show that increased competition increased the returns to skill without strong evidence of an increase in quality.

Keywords: Competition; Inertia; Quality; Returns to skill (search for similar items in EconPapers)
JEL-codes: I13 I18 J31 J44 L15 (search for similar items in EconPapers)
Date: 2020-01
New Economics Papers: this item is included in nep-com and nep-hea
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP14292 (application/pdf)

Related works:
Working Paper: Who benefits when inertia is reduced? Competition, quality and returns to skill in health care markets (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:14292

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP14292

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().