28 Pages Posted: 1 Feb 2013
Date Written: January 2013
In this paper we focus on the implications of consumer heterogeneity for whether competition will improve outcomes in health care markets. We show that competition generally favours the majority group as higher quality for the majority is an effective way to increase the quality signal and attract patients. A regulator who is concerned about equity may protect the minority group by not introducing competition. Alternatively, if the minority group is favoured by the providers under monopoly, competition can improve equity by forcing the providers to increase quality for the majority group.
Keywords: competition, equity, hospitals, quality
JEL Classification: D63, H11, I11, I14, L31
Suggested Citation: Suggested Citation
Halonen-Akatwijuka, Maija and Propper, Carol, Competition, Equity and Quality in Healthcare (January 2013). CEPR Discussion Paper No. DP9325. Available at SSRN: https://ssrn.com/abstract=2210296
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File name: DP9325.
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