Health Economics
14th Edition
ISBN: 9781137029966
Author: Jay Bhattacharya
Publisher: SPRINGER NATURE CUSTOMER SERVICE
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Question
Chapter 6, Problem 17EQ
a)
To determine
Explain the effect of hospital merging on the price of hospital care.
b)
To determine
Explain the effect of hospital merging on the improvisation of hospital care.
c)
To determine
Explain the changes if the hospitals are run by the government.
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Below is the abstract of a recentNational Bureau of Economic Research working paper entitled “Can governments do it better? Merger mania and hospital outcomes in the English NHS” by Martin Gaynor, Mauro Laudicella, and Carol Propper (2011). The literature on mergers between private hospitals suggests that such mergers often produce little benefit. Despite this, the UK government has pursued an active policy of hospital mergers. These mergers are initiated by a regulator, acting on behalf of the public, and justified on the grounds that merger will improve outcomes. We examine whether this promise is met. We exploit the fact that between 1997 and 2006 in England around half the short term general hospitals were involved in a merger, but that politics means that selection for a merger may be random with respect to future performance. We examine the impact of mergers on a large set of outcomes including financial performance, productivity, waiting times and clinical quality and find…
According to Gaynor, Laudicella, and Propper (2011),
In the U.K., most hospitals are owned by the government, rather than privately held. In a setting where most hospitals are not owned by the government (such as in the U.S.), what effect do you predict that hospital mergers would have on the price of hospital care? Presumably, hospital mergers would lead to reduced competition and higher prices for any given type of care.
Use supply and demand concepts to explain why the American Medical Association finds it beneficial to require more strict standards for entrance to medical schools
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