Optimal Reimbursement Policy in Health Care: Competition, Ownership Structure and Quality Provision

Rune Stenbacka, Mihkel Tombak

Research output: Contribution to journalArticleScientificpeer-review

1 Citation (Scopus)

Abstract

We analytically characterize the effects of ownership and competition in the healthcare industry on quality provision, market coverage and optimal reimbursement policy. A for-profit monopoly selects a lower quality than a nonprofit supplier, and the socially optimal reimbursement rate with a nonprofit monopoly exceeds that with a for-profit monopoly. We establish that the optimal repayment policy is invariant to the introduction of competition by a for-profit high-quality supplier. Thus, market coverage is invariant to the introduction of competition, whereas consumers with a higher willingness to pay for quality are better off with competition.
Original languageEnglish
Peer-reviewed scientific journalThe B.E. Journal of Economic Analysis & Policy
Volume18
Issue number1
Pages (from-to)1-19
Number of pages19
ISSN2194-6108
DOIs
Publication statusPublished - 23.01.2018
MoE publication typeA1 Journal article - refereed

Keywords

  • 511 Economics
  • for-profit vs nonprofit healthcare provision
  • competition in healthcare
  • healthcare quality
  • quality differentiation
  • mixed duopoly

Fingerprint Dive into the research topics of 'Optimal Reimbursement Policy in Health Care: Competition, Ownership Structure and Quality Provision'. Together they form a unique fingerprint.

  • Cite this