IDEAS home Printed from https://ideas.repec.org/p/zbw/vfsc15/112853.html
   My bibliography  Save this paper

The Market for Nursing Homes in Germany: a spatial competition approach

Author

Listed:
  • Hange, Ulrich

Abstract

The German nursing home industry rapidly grows due to the permanent increase of people in need of long-term care, in particular. At the same time a large share of residents in German nursing homes is in need of social assistance. In a simple spatial competition model we show that the presence of people in need of social assistance increases prices of nursing homes. Bargaining between nursing homes and long-term care insurance companies and social assistance administration can restrain this price-enhancing effect. In addition, price negotiation may help to reach a social optimal number of nursing homes. Thus, our analysis also presents a rationale in favor of negotiations in nursing home markets from a welfare point of view.

Suggested Citation

  • Hange, Ulrich, 2015. "The Market for Nursing Homes in Germany: a spatial competition approach," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112853, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc15:112853
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/112853/1/VfS_2015_pid_145.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Pesis-Katz, I. & Phelps, C.E. & Temkin-Greener, H. & Spector, W.D. & Veazie, P. & Mukamel, D.B., 2013. "Making difficult decisions: The role of quality of care in choosing a nursing home," American Journal of Public Health, American Public Health Association, vol. 103(5), pages 31-37.
    2. Pedro Barros & Xavier Martinez-Giralt, 2005. "Negotiation Advantages of Professional Associations in Health Care," International Journal of Health Economics and Management, Springer, vol. 5(2), pages 191-204, June.
    3. Martin Gaynor & Kate Ho & Robert J. Town, 2015. "The Industrial Organization of Health-Care Markets," Journal of Economic Literature, American Economic Association, vol. 53(2), pages 235-284, June.
    4. Henrick Horn & Asher Wolinsky, 1988. "Bilateral Monopolies and Incentives for Merger," RAND Journal of Economics, The RAND Corporation, vol. 19(3), pages 408-419, Autumn.
    5. Nyman, John A, 1994. "The Effects of Market Concentration and Excess Demand on the Price of Nursing Home Care," Journal of Industrial Economics, Wiley Blackwell, vol. 42(2), pages 193-204, June.
    6. Andrew T. Ching & Fumiko Hayashi & Hui Wang, 2015. "Quantifying The Impacts Of Limited Supply: The Case Of Nursing Homes," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 56, pages 1291-1322, November.
    7. repec:zbw:rwirep:0495 is not listed on IDEAS
    8. Matthew Grennan, 2013. "Price Discrimination and Bargaining: Empirical Evidence from Medical Devices," American Economic Review, American Economic Association, vol. 103(1), pages 145-177, February.
    9. Luigi Siciliani & Anderson Stanciole, 2013. "Bargaining and the provision of health services," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 14(3), pages 391-406, June.
    10. Wasem, Jürgen & Rothgang, Heinz & Greß, Stefan, 2005. "Vergütungsfindung auf dem stationären Pflegemarkt in Nordrhein-Westfalen: Bestandaufnahme und Alternativen," IBES Diskussionsbeiträge 144, University of Duisburg-Essen, Institute of Business and Economic Studie (IBES).
    11. Schmitz, Hendrik & Stroka, Magdalena A., 2014. "Do Elderly Choose Nursing Homes by Quality, Price or Location?," Ruhr Economic Papers 495, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    12. Gravelle, Hugh, 1999. "Capitation contracts: access and quality," Journal of Health Economics, Elsevier, vol. 18(3), pages 315-340, June.
    13. Lakdawalla, Darius & Philipson, Tomas, 2006. "The nonprofit sector and industry performance," Journal of Public Economics, Elsevier, vol. 90(8-9), pages 1681-1698, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Herr, A. & Saric, A., 2016. "The Welfare Effects of Single Rooms in German Nursing Homes: A Structural Approach," Health, Econometrics and Data Group (HEDG) Working Papers 16/23, HEDG, c/o Department of Economics, University of York.
    2. Martin Gaynor & Kate Ho & Robert J. Town, 2015. "The Industrial Organization of Health-Care Markets," Journal of Economic Literature, American Economic Association, vol. 53(2), pages 235-284, June.
    3. Gaynor, Martin & Town, Robert J., 2011. "Competition in Health Care Markets," Handbook of Health Economics, in: Mark V. Pauly & Thomas G. Mcguire & Pedro P. Barros (ed.), Handbook of Health Economics, volume 2, chapter 0, pages 499-637, Elsevier.
    4. Gautam Gowrisankaran & Aviv Nevo & Robert Town, 2015. "Mergers When Prices Are Negotiated: Evidence from the Hospital Industry," American Economic Review, American Economic Association, vol. 105(1), pages 172-203, January.
    5. Donna, Javier D. & Pereira, Pedro & Trindade, Andre & Yoshida, Renan C., 2020. "Direct-to-Consumer Sales by Manufacturers and Bargaining," MPRA Paper 105773, University Library of Munich, Germany.
    6. Walter Beckert, 2018. "An Empirical Analysis of Countervailing Power in Business-to-Business Bargaining," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 52(3), pages 369-402, May.
    7. Johannes Münster & Markus Reisinger, 2021. "Sequencing Bilateral Negotiations with Externalities," ECONtribute Discussion Papers Series 096, University of Bonn and University of Cologne, Germany.
    8. Pierre Dubois & Morten Sæthre, 2020. "On the Effect of Parallel Trade on Manufacturers' and Retailers' Profits in the Pharmaceutical Sector," Econometrica, Econometric Society, vol. 88(6), pages 2503-2545, November.
    9. Rainer Kotschy & David E. Bloom, 2022. "A Comparative Perspective on Long-Term Care Systems," NBER Working Papers 29951, National Bureau of Economic Research, Inc.
    10. Qi Feng & Chengzhang Li & Mengshi Lu & J. George Shanthikumar, 2022. "Implementing Environmental and Social Responsibility Programs in Supply Networks Through Multiunit Bilateral Negotiation," Management Science, INFORMS, vol. 68(4), pages 2579-2599, April.
    11. Kate Ho & Robin S. Lee, 2017. "Insurer Competition in Health Care Markets," Econometrica, Econometric Society, vol. 85, pages 379-417, March.
    12. Rey, Patrick & Vergé, Thibaud, 2016. "Secret contracting in multilateral relations," TSE Working Papers 16-744, Toulouse School of Economics (TSE), revised Dec 2020.
    13. Haizhen Lin, 2015. "Quality Choice And Market Structure: A Dynamic Analysis Of Nursing Home Oligopolies," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 56(4), pages 1261-1290, November.
    14. Timothy Besley & James M. Malcolmson, 2016. "Choice and Competition in Public Service Provision," STICERD - Public Economics Programme Discussion Papers 29, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    15. Kurt R. Brekke & Luigi Siciliani & Odd Rune Straume, 2018. "Can Competition Reduce Quality?," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 174(3), pages 421-447, September.
    16. Besley, Timothy & Malcomson, James M., 2018. "Competition in public service provision: The role of not-for-profit providers," Journal of Public Economics, Elsevier, vol. 162(C), pages 158-172.
    17. Jason Allen & Robert Clark & Jean-François Houde, 2019. "Search Frictions and Market Power in Negotiated-Price Markets," Journal of Political Economy, University of Chicago Press, vol. 127(4), pages 1550-1598.
    18. Stuart V. Craig & Matthew Grennan & Ashley Swanson, 2021. "Mergers and marginal costs: New evidence on hospital buyer power," RAND Journal of Economics, RAND Corporation, vol. 52(1), pages 151-178, March.
    19. Jeon, Doh-Shin & Lefouili, Yassine, 2020. "Decentralizing Cooperation through Upstream Bilateral Agreements," CEPR Discussion Papers 14974, C.E.P.R. Discussion Papers.
    20. Gloria Sheu & Charles Taragin, 2021. "Simulating mergers in a vertical supply chain with bargaining," RAND Journal of Economics, RAND Corporation, vol. 52(3), pages 596-632, September.

    More about this item

    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:vfsc15:112853. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/vfsocea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.