Quality Competition for Screening and Treatment Services

Posted: 4 May 2011 Last revised: 28 May 2011

See all articles by Evrim Didem Gunes

Evrim Didem Gunes

Koc University - College of Administrative Sciences and Economics

Stephen E. Chick

INSEAD - Technology and Operations Management

Luk N. Van Wassenhove

INSEAD

Date Written: May 3, 2010

Abstract

This paper examines how quality for one type of preventive health care services, screening services are determined under competition and explores its links with the treatment services. A Hotelling type of model is introduced for this purpose. Two providers offer both screening and treatment services, and decide on their quality for both services. The equilibrium quality values are characterized assuming providers are identical and patients are free to choose providers for screening and treatment independently. Screening quality and treatment quality are shown to be strategic complements. The social planner can achieve the desired quality level via appropriate reimbursements for screening and treatment of the disease at early and late stage. A sensitivity analysis investigates the effect of model parameters on the equilibrium quality levels.

Suggested Citation

Gunes, Evrim and Chick, Stephen E. and Van Wassenhove, Luk N., Quality Competition for Screening and Treatment Services (May 3, 2010). Annals of Operation Research, Vol. 178, 2010. Available at SSRN: https://ssrn.com/abstract=1830245

Evrim Gunes

Koc University - College of Administrative Sciences and Economics ( email )

Rumelifeneri Yolu
Sariyer 34450, Istanbul
Turkey

Stephen E. Chick (Contact Author)

INSEAD - Technology and Operations Management ( email )

Boulevard de Constance
77 305 Fontainebleau Cedex
France

HOME PAGE: http://faculty.insead.edu/chick/

Luk N. Van Wassenhove

INSEAD ( email )

Boulevard de Constance
77 305 Fontainebleau Cedex
France
(33) (0)1 60 72 42 66 (Phone)
(33) (0)1 60 72 40 49 (Fax)

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