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Monopolistic Competition and Supply-Side Cost Sharing in the Physician Services Market

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Abstract

The interaction of insurance and the market for physician services is considered in a model where imperfectly informed consumers rely on doctors for advice on the utilization of services and there is monopolistic competition among physicians on the basis of price and the quality of their advice. Equilibria under fee for service and capitation are compared, and I analyze the use of a system of capitation and partial supply-side cost sharing to attain an outcome superior to either pure fee for service or pure capitation.

Suggested Citation

  • Blomqvist, Ake, 1997. "Monopolistic Competition and Supply-Side Cost Sharing in the Physician Services Market," University of Western Ontario, Departmental Research Report Series 9705, University of Western Ontario, Department of Economics.
    • Handle: RePEc:uwo:uwowop:9705
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    File URL: https://ir.lib.uwo.ca/cgi/viewcontent.cgi?article=1421&context=economicsresrpt
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    Cited by:

    1. Nibene H. Somé & Rose Anne Devlin & Nirav Mehta & Gregory S. Zaric & Sisira Sarma, 2020. "Stirring the pot: Switching from blended fee‐for‐service to blended capitation models of physician remuneration," Health Economics, John Wiley & Sons, Ltd., vol. 29(11), pages 1435-1455, November.
    2. H. E. Frech & Peter Zweifel, 2017. "Market Socialism and Community Rating in Health Insurance," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 59(3), pages 405-427, September.
    3. Mingshan Lu & Ching‐to Albert Ma & Lasheng Yuan, 2003. "Risk selection and matching in performance‐based contracting," Health Economics, John Wiley & Sons, Ltd., vol. 12(5), pages 339-354, May.

    More about this item

    Keywords

    INSURANCE; MONOPOLIES; COMPETITION; HEALTH SERVICES; SUPPLY;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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