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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/26187
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| Title: | Concentration and Pricing in the Hospital Sector |
| Authors: | James, Paul |
| Issue Date: | 2002 |
| Series/Report no.: | EC-02-08 |
| Abstract: | The pricing behavior of non-profit hospitals is an important issue given
the size of the non-profit hospital sector in relation to the for-profit
sector. It is generally accepted in the literature that for-profit
hospitals set higher prices than their non-profit counterparts. However,
there is disagreement over the relative behavior of the different types
of hospital in the presence of market power. Some authors argue that
market power causes hospitals to maintain higher prices regardless of
their ownership, while others argue that greater levels of market power
are associated with lower prices for non-profit hospitals. Clearly, how
market concentration influences the pricing behavior of non-profits has
implications for antitrust policy and is an interesting topic for
research. This paper reviews the previous research that identifies the
effects of market power on the behavior of hospitals under different
forms of control. It then offers a new investigation of the issues using
data from a sample of patients suffering from alcohol and drug related
disorders. These data have a distinct advantage over those used in
previous research in that they examine a more standardized area of
treatment and provide more direct control for severity of illness than
those used by previous authors. In addition, the model used in this
paper avoids some of the specification issues inherent in some of the
prior research. |
| URI: | http://hdl.handle.net/2451/26187 |
| Appears in Collections: | Economics Working Papers
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