Rune Stenbacka, Mihkel Tombak

Competition between For-Profit and Nonprofit Health Care Providers and Quality

Volume 176 () / Issue 2, pp. 243-275 (33)
Published 12.03.2020

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We develop a model including many features of health care systems: a limited number of approved treatments of certain qualities, insurance schemes reimbursing costs of a standard service, and nonprofit organizations competing with for-profit suppliers. All the equilibria exhibit quality differentiation, and the nonprofit captures a higher market share. Nonprofits (for-profits) supply the standard service when the quality upgrade induces a sufficiently high (low) increase in production costs. When the nonprofit provides the standard quality, all patients are served. In contrast, in a for-profit duopoly the standard-quality provider charges a price premium, implying that there are excluded consumers.

Rune Stenbacka No current data available.

Mihkel Tombak No current data available.