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Imperfect Quality Information in a Quality-Competitive Hospital Market

Author

Listed:
  • Hugh Gravelle

    (National Primary Care Research and Development Centre, Centre for Health Economics, University of York)

  • Peter Sivey

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

Abstract

We examine the implications of policies to improve information about the qualities of profit seeking duopoly hospitals which face the same regulated price and compete on quality. We show that if the hospital costs of quality are similar then better information increases the quality of both hospitals. However if the costs are sufficiently different improved information will reduce the quality of both hospitals.

Suggested Citation

  • Hugh Gravelle & Peter Sivey, 2009. "Imperfect Quality Information in a Quality-Competitive Hospital Market," Melbourne Institute Working Paper Series wp2009n05, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    • Handle: RePEc:iae:iaewps:wp2009n05
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    File URL: http://melbourneinstitute.unimelb.edu.au/downloads/working_paper_series/wp2009n05.pdf
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    References listed on IDEAS

    as
    1. David M. Cutler & Robert S. Huckman & Mary Beth Landrum, 2004. "The Role of Information in Medical Markets: An Analysis of Publicly Reported Outcomes in Cardiac Surgery," American Economic Review, American Economic Association, vol. 94(2), pages 342-346, May.
    2. Marcello Montefiori, 2005. "Spatial competition for quality in the market for hospital care," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 6(2), pages 131-135, June.
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    More about this item

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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