Competition, Equity and Quality in Healthcare

28 Pages Posted: 1 Feb 2013

See all articles by Maija Halonen-Akatwijuka

Maija Halonen-Akatwijuka

University of Bristol - Leverhulme Centre for Market and Public Organisation (CMPO)

Carol Propper

Imperial College London Business School; Centre for Economic Policy Research (CEPR); University of Bristol - Leverhulme Centre for Market and Public Organisation (CMPO)

Date Written: January 2013

Abstract

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

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

Maija Halonen-Akatwijuka (Contact Author)

University of Bristol - Leverhulme Centre for Market and Public Organisation (CMPO) ( email )

Mary Paley Building
12 Priory Road Department of Economics
Bristol BS8 1TN
United Kingdom
44-117-9288429 (Phone)
44-117-9288577 (Fax)

Carol Propper

Imperial College London Business School ( email )

South Kensington Campus
Exhibition Road
London SW7 2AZ, SW7 2AZ
United Kingdom

Centre for Economic Policy Research (CEPR)

London
United Kingdom

University of Bristol - Leverhulme Centre for Market and Public Organisation (CMPO) ( email )

12 Priory Road
Bristol BS8 1TN
United Kingdom

HOME PAGE: http://www.bris.ac.uk/Depts/Economics/department/profiles/propper.htm

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