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.
- 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 Social Welfare