1. Privatization of local public hospitals: effect on budget, medical service quality, and social welfare.
- Author
-
Aiura H and Sanjo Y
- Subjects
- Choice Behavior, Economic Competition, Health Facility Merger economics, Health Facility Merger standards, Health Facility Merger trends, Hospitals, Public standards, Hospitals, Public trends, Humans, Japan, Models, Economic, Patient Preference, Privatization trends, Quality of Health Care standards, Quality of Health Care trends, Rural Health Services economics, Rural Health Services standards, Rural Health Services trends, Urban Health Services economics, Urban Health Services standards, Urban Health Services trends, Health Expenditures trends, Hospitals, Public economics, Privatization economics, Quality of Health Care economics
- Abstract
We analyze a duopolistic health care market in which a rural public hospital competes against an urban public hospital on medical quality, by using a Hotelling-type spatial competition model extended into a two-region model. We show that the rural public hospital provides excess quality for each unit of medical service as compared to the first-best quality, and the profits of the rural public hospital are lower than those of the urban public hospital because the provision of excess quality requires larger expenditure. In addition, we investigate the impact of the partial (or full) privatization of local public hospitals.
- Published
- 2010
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