Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
962183 | Journal of Health Economics | 2007 | 16 Pages |
Abstract
Two-tier charging, the practice of offering separate qualities of service at different prices, is a growing practice in public hospitals internationally. This paper models two-tier charging as a Stackelberg game in which the Ministry of Health leads by setting prices and a representative hospital follows by setting quality levels to maximise surplus in response. Whether or not two-tier charging will secure cross-subsidy from superior to basic service users depends on the own and cross-quality effects of the demand functions for the two services. Under a range of assumptions, the policy will evoke cross-subsidy from basic to superior services.
Keywords
Related Topics
Health Sciences
Medicine and Dentistry
Public Health and Health Policy
Authors
Barbara McPake, Kara Hanson, Christopher Adam,