Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/221426
Authors: 
Rogerson, William P.
Year of Publication: 
1993
Series/Report no.: 
Discussion Paper No. 1069
Abstract: 
Under prospective pricing, payers for health care essentially use price regulation of hospitals as a way of indirectly regulating the provision of treatment intensity. This paper ppresents a theory of how a nonprofit hospital selects treatment intensities for its priducts given the payer's choice of prices and then determines how the payer should select prices in light of this theory. The main result is that, in quilibrium, the ration of price to marginal cost will vary across products inversely with the elasticity of demand with respect to treatment intensity. This means that, generally, the hospital will earn positive(negative) accounting profit on products with low(high) intensity elasticities of demand.
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.