Abstract
We develop a model including many features of health care systems: a limited number of approved treatments of certain qualities, insurance schemes reimbursing costs of a standard service, and nonprofit organizations competing with for-profit suppliers. All the equilibria exhibit quality differentiation, and the nonprofit captures a higher market share. Nonprofits (for-profits) supply the standard service when the quality upgrade induces a sufficiently high (low) increase in production costs. When the nonprofit provides the standard quality, all patients are served. In contrast, in a for-profit duopoly the standard-quality provider chargesa price premium, implying that there are excluded consumers.
| Original language | English |
|---|---|
| Peer-reviewed scientific journal | Journal of Institutional and Theoretical Economics |
| Volume | 176 |
| Issue number | 2 |
| Pages (from-to) | 243-275 |
| Number of pages | 33 |
| ISSN | 0932-4569 |
| DOIs | |
| Publication status | Published - 12.03.2020 |
| MoE publication type | A1 Journal article - refereed |
Keywords
- 511 Economics
- competition between for-profits and nonprofits
- exclusion
- health care quality
- Mixed Duopoly
- nonprofit organizations
- quality differentiation
Areas of Strength and Areas of High Potential (AoS and AoHP)
- AoS: Competition economics and service strategy - Quantitative consumer behaviour and competition economics
