Determinants of Price Discrimination in the Acquisition of Medical Devices

27 Pages Posted: 11 May 2012 Last revised: 3 Mar 2014

Mercedes Vellez

University of Rome II Tor Vergata, Faculty of Economics, Department of Economics and Institutions (DEI); Center for the Study of State and Society (CEDES)

Date Written: May 10, 2012

Abstract

Medical device expenditures are an important driver of the growth in health care spending and hospitals pay significantly different prices for the same medical device. This paper uses hospitals’ acquisition data to explore the determinants of price discrimination in the acquisition of medical devices across Italian hospitals considering demand factors such as institutional characteristics of the buyer, devices substitution patterns, area of localization, and purchase conditions. I find evidence that public hospital trusts and those located in northern regions are more efficient in acquiring medical devices, and that more flexibility in contracting with different device manufacturers and higher purchase volumes reduce the likelihood of paying higher prices.

Keywords: price discrimination, hospital efficiency, medical devices, procurement

JEL Classification: I18, H57, C25

Suggested Citation

Vellez, Mercedes, Determinants of Price Discrimination in the Acquisition of Medical Devices (May 10, 2012). CEIS Working Paper No. 235. Available at SSRN: https://ssrn.com/abstract=2055699 or http://dx.doi.org/10.2139/ssrn.2055699

Mercedes Vellez (Contact Author)

University of Rome II Tor Vergata, Faculty of Economics, Department of Economics and Institutions (DEI) ( email )

Via di Tor Vergata
Rome, Lazio 00133
Italy

Center for the Study of State and Society (CEDES) ( email )

Sanchez de Bustamante 27
Buenos Aires, C1173AAA
Argentina

Paper statistics

Downloads
99
Rank
221,598
Abstract Views
670