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Imperfect quality information in a quality-competitive hospital market

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JournalJournal of Health Economics
DatePublished - Jul 2010
Issue number4
Volume29
Number of pages12
Pages (from-to)524-35
Original languageEnglish

Abstract

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.

    Research areas

  • 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

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