Abstract

http://ssrn.com/abstract=1882883
 
 

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Competition in Health Care Markets


Martin S. Gaynor


Carnegie Mellon University; National Bureau of Economic Research (NBER); Leverhulme Centre for Market and Public Organisation

Robert J. Town


University of Pennsylvania - The Wharton School; National Bureau of Economic Research (NBER)

July 2011

NBER Working Paper No. w17208

Abstract:     
This paper reviews the literature devoted to studying markets for health care services and health insurance. There has been tremendous growth and progress in this field. A tremendous amount of new research has been done in this area over the last 10 years. In addition, there has been increasing development and use of frontier industrial organization methods. We begin by examining research on the determinants of market structure, considering both static and dynamic models. We then model the strategic determination of prices between health insurers and providers where insurers market their products to consumers based, in part, on the quality and breadth of their provider network. We then review the large empirical literature on the strategic determination of hospital prices through the lens of this model. Variation in the quality of health care clearly can have large welfare consequences. We therefore also describe the theoretical and empirical literature on the impact of market structure on quality of health care. The paper then moves on to consider competition in health insurance markets and physician services markets. We conclude by considering vertical restraints and monopsony power.

Number of Pages in PDF File: 159

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Date posted: July 11, 2011  

Suggested Citation

Gaynor, Martin S. and Town, Robert J., Competition in Health Care Markets (July 2011). NBER Working Paper No. w17208. Available at SSRN: http://ssrn.com/abstract=1882883

Contact Information

Martin S. Gaynor (Contact Author)
Carnegie Mellon University ( email )
H. John Heinz III School of Public Policy
and Management
Pittsburgh, PA 15213-3890
United States
412-268-7933 (Phone)
412-268-5338 (Fax)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Leverhulme Centre for Market and Public Organisation
12 Priory Road
Bristol BS8 1TN
United Kingdom
Robert J. Town
University of Pennsylvania - The Wharton School ( email )
3641 Locust Walk
Philadelphia, PA 19104-6365
United States
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
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