Most studies of competition in health care focus on prices and costs, but concerns about quality play a central role in policy debates. If demand is inelastic to quality, then competition may reduce patient welfare. This study uses a dataset of patient registrations for kidney transplantation in conjunction with a mixed logit model to gauge consumers' responsiveness to quality when choosing hospitals. Results indicate that at the hospital level, a one-standard deviation increase in the graft-failure rate is associated with a 6% decline in patient registrations. Privately-insured patients are more responsive to quality than Medicare patients, suggesting that insurers consider quality when contracting with providers.
CITATION STYLE
Howard, D. H. (2006). Quality and Consumer Choice in Healthcare: Evidence from Kidney Transplantation. B.E. Journal of Economic Analysis and Policy, 5(1). https://doi.org/10.1515/1538-0653.1349
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