Author(s): Brekke, Kurt R. ; Levaggi, Rosella ; Siciliani, Luigi ; Straume, Odd Rune
Date: 2016
Persistent ID: http://hdl.handle.net/1822/43175
Origin: RepositóriUM - Universidade do Minho
Subject(s): Patient mobility; Health care quality; Income inequalities; Regional welfare; Salop model; Social Sciences; Science & Technology; Ciências Sociais::Economia e Gestão
We study the effects of cross-border patient mobility on health care quality and welfare when income varies across and within regions. We use a Salop model with a high-, middle-, and low-income region. In each region, a policy maker chooses health care quality to maximise the utility of its residents when health care costs are financed by general income taxation. In equilibrium, regions with higher income offer better quality, which creates an incentive for patient mobility from lower- to higher-income regions. Assuming a prospective payment scheme based on DRG-pricing, we find that lower non-monetary (administrative) mobility costs have (i) no effect on quality or welfare in the high-income region; (ii) a negative effect on quality but a positive effect on welfare for the middle-income region; and (iii) ambiguous effects on quality and welfare for the low-income region. Lower monetary mobility costs (copayments) might reduce welfare in both the middle- and low-income region. Thus, health policies that stimulate cross-border patient mobility can be counterproductive when regions differ in income.
This work was carried out with funding from COMPETE reference no. POCI-01-0145-FEDER-006683, with the FCT/MEC’s financial support through national funding and by the ERDF through the Operational Programme on “Competitiveness and Internationalization – COMPETE 2020 under the PT2020 Partnership Agreement. The paper has benefited from being presented at the European Health EconomicsWorkshop 2015 in Toulouse. We are grateful for comments by Christoph Schottmüller, Helmuth Cremer, and three anonymous referees.
