We found a match
Your institution may have rights to this item. Sign in to continue.
- Title
Can hospitals compete on quality?
- Authors
Sadat, Somayeh; Abouee-Mehrizi, Hossein; Carter, Michael
- Abstract
In this paper, we consider two hospitals with different perceived quality of care competing to capture a fraction of the total market demand. Patients select the hospital that provides the highest utility, which is a function of price and the patient's perceived quality of life during their life expectancy. We consider a market with a single class of patients and show that depending on the market demand and perceived quality of care of the hospitals, patients may enjoy a positive utility. Moreover, hospitals share the market demand based on their perceived quality of care and capacity. We also show that in a monopoly market (a market with a single hospital) the optimal demand captured by the hospital is independent of the perceived quality of care. We investigate the effects of different parameters including the market demand, hospitals' capacities, and perceived quality of care on the fraction of the demand that each hospital captures using some numerical examples.
- Subjects
MEDICAL quality control; HOSPITAL care; ECONOMIC demand; LIFE expectancy; MEDICAL tourism; CONGESTION pricing
- Publication
Health Care Management Science, 2015, Vol 18, Issue 3, p376
- ISSN
1386-9620
- Publication type
Article
- DOI
10.1007/s10729-015-9319-1