Beitia A, (2003)

‘Hospital Quality Choice and Market Structure in a Regulated Duopoly’

Journal of Health Economics 22, pp. 1011–1036

• Theoretical paper modelling the effect of hospital characteristics and purchaser contracts on market structure.
• The paper uses a Hotelling framework to assess how hospital quality, efficiency, and informational asymmetry interact to affect market structure (monopoly or duopoly) and the optimum contract offered by a state purchaser.
• Finds that even if hospital quality is non-verifiable, the purchaser or regulator can use a two-part tariff to ensure the hospital offers the desired level of quality.

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