Publicação
Hospital competition with soft budgets
| Resumo: | We study the incentives for quality provision and cost efficiency for hospitals with soft budgets, where the payer can cover deficits or confiscate surpluses. While a higher bailout probability reduces cost efficiency, the effect on quality is ambiguous. Profit confiscation reduces both quality and cost efficiency. First-best is achieved by a strict no-bailout and no-profit-confiscation policy when the regulated price is optimally set. However, for suboptimal prices, a more lenient bailout policy can be welfare-improving. When we allow for heterogeneity in costs and qualities, we also show that a softer budget can raise quality for high-cost patients. |
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| Autores principais: | Brekke, Kurt R. |
| Outros Autores: | Siciliani, Luigi; Straume, Odd Rune |
| Assunto: | Cost efficiency hospital competition quality soft budgets Ciências Sociais::Economia e Gestão I: Health, Education, and Welfare::I1: Health::I11: Analysis of Health Care Markets I: Health, Education, and Welfare::I1: Health::I18: Government Policy • Regulation • Public Health L: Industrial Organization::L1: Market Structure, Firm Strategy, and Market Performance::L13: Oligopoly and Other Imperfect Markets L: Industrial Organization::L3: Nonprofit Organizations and Public Enterprise::L32: Public Enterprises • Public-Private Enterprises |
| Ano: | 2015 |
| País: | Portugal |
| Tipo de documento: | artigo |
| Tipo de acesso: | acesso restrito |
| Instituição associada: | Universidade do Minho |
| Idioma: | inglês |
| Origem: | RepositóriUM - Universidade do Minho |
| Resumo: | We study the incentives for quality provision and cost efficiency for hospitals with soft budgets, where the payer can cover deficits or confiscate surpluses. While a higher bailout probability reduces cost efficiency, the effect on quality is ambiguous. Profit confiscation reduces both quality and cost efficiency. First-best is achieved by a strict no-bailout and no-profit-confiscation policy when the regulated price is optimally set. However, for suboptimal prices, a more lenient bailout policy can be welfare-improving. When we allow for heterogeneity in costs and qualities, we also show that a softer budget can raise quality for high-cost patients. |
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