Imperfect quality information in a quality-competitive hospital market

TY - JOUR

T1 - Imperfect quality information in a quality-competitive hospital market

AU - Gravelle, H.

AU - Sivey, Peter

PY - 2010/7

Y1 - 2010/7

N2 - We examine the implications of policies to improve information about the qualities of profit-seeking duopoly hospitals which face the same regulated price and compete on quality. We show that if hospital costs of quality are similar then better information increases the quality of both hospitals. However, if the costs are sufficiently different improved information will reduce the quality of both hospitals. Moreover, even when quality increases, better information may increase or decrease patient welfare depending on whether an ex post or ex ante view of welfare is taken.

AB - We examine the implications of policies to improve information about the qualities of profit-seeking duopoly hospitals which face the same regulated price and compete on quality. We show that if hospital costs of quality are similar then better information increases the quality of both hospitals. However, if the costs are sufficiently different improved information will reduce the quality of both hospitals. Moreover, even when quality increases, better information may increase or decrease patient welfare depending on whether an ex post or ex ante view of welfare is taken.

KW - Attitude to Health Economic Competition Facility Regulation and Control Health Policy Health Services Research Hospital Costs Hospitals, Public/economics/standards Humans Information Dissemination Models, Econometric Quality of Health Care/economics Socia

UR - http://www.scopus.com/inward/record.url?scp=77954660841&partnerID=8YFLogxK

U2 - 10.1016/j.jhealeco.2010.04.003

DO - 10.1016/j.jhealeco.2010.04.003

M3 - Article

VL - 29

SP - 524

EP - 535

JO - Journal of Health Economics

JF - Journal of Health Economics

IS - 4

ER -