Competition in Health Care Markets: Treatment Volume and Quality

Research output: Working paperDiscussion paperOther research output

Abstract

This paper introduces a workhorse model to analyze the effects of provider and insurer competition in health care markets. The two contracting imperfections we focus on are the following: (i) whether or not a patient should be treated and (ii) treatment quality are both not contractible. We derive conditions under which the market can implement first best quality and volume with the optimal competition intensities. First best competition intensity is strictly positive in both markets. If there is under-investment in quality, provider competition should be increased. Increasing insurer competition tends to increase treatment volume. If the planner cannot make the provider market competitive enough, it is optimal to increase insurer competition beyond its first best level thereby creating over-treatment.
LanguageEnglish
Place of PublicationTilburg
PublisherCentER, Center for Economic Research
Number of pages41
Volume2018-013
StatePublished - 9 Apr 2018

Publication series

NameCentER Discussion Paper
Volume2018-013

Fingerprint

Health care market
Insurer
Competitive market
Underinvestment
Contracting
Imperfections

Keywords

  • competition in health care markets
  • insurer comptition
  • provider comptition
  • treatment volume
  • treatment quality

Cite this

Boone, J. (2018). Competition in Health Care Markets: Treatment Volume and Quality. (CentER Discussion Paper; Vol. 2018-013). Tilburg: CentER, Center for Economic Research.
Boone, Jan. / Competition in Health Care Markets : Treatment Volume and Quality. Tilburg : CentER, Center for Economic Research, 2018. (CentER Discussion Paper).
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Boone, J 2018 'Competition in Health Care Markets: Treatment Volume and Quality' CentER Discussion Paper, vol. 2018-013, CentER, Center for Economic Research, Tilburg.

Competition in Health Care Markets : Treatment Volume and Quality. / Boone, Jan.

Tilburg : CentER, Center for Economic Research, 2018. (CentER Discussion Paper; Vol. 2018-013).

Research output: Working paperDiscussion paperOther research output

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Boone J. Competition in Health Care Markets: Treatment Volume and Quality. Tilburg: CentER, Center for Economic Research. 2018 Apr 9, (CentER Discussion Paper).