Original scientific paper
https://doi.org/10.1080/1331677X.2017.1340177
Reimbursement and hospital competition in China
Chan Wang
; a School of Finance, Collaborative Innovation Center of Scientific Finance & Industry, Institute of Guangdong Economy & Social Development, Guangdong University of Finance & Economics, Guangzhou, P.R. China
You-hua Chen
orcid.org/0000-0001-5697-9295
; College of Economics and Management and Guangdong Center for Rural Economics Studies, South China Agricultural University, Guangzhou, P.R. China
Abstract
Quality and the costs of health care are of concern among patients.
Differing from previous research into hospital competition, this
article captures the impact of price subsidy of public hospitals on
the quality of private hospitals, considering both horizontal and
vertical product differentiation by employing a two-stage dynamic
game under Cournot and Stackelberg competition. Firstly, the
results of this study indicate that medical reimbursement of public
hospitals has stimulating effects on the quality of private hospitals
and the improvement of quality is related to the degree of hospital
competition. Second, the quality of health care and patients’ surplus
and social welfare are the highest under Stackelberg competition
if the public hospital is the leader while the private hospital is the
follower. Finally, the demand for health care rises with the price
subsidy of public hospitals. These conclusions have significant policy
implications for health care system reform, especially for China.
Keywords
Price subsidy; hospital competition; quality; game theory
Hrčak ID:
193179
URI
Publication date:
1.12.2017.
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