Two-tier charging strategies in public hospitals: Implications for intra-hospital resource allocation and equity of access to hospital services


McPake, B; Hanson, K; Adam, C; (2007) Two-tier charging strategies in public hospitals: Implications for intra-hospital resource allocation and equity of access to hospital services. Journal of health economics, 26 (3). pp. 447-62. ISSN 0167-6296 DOI: https://doi.org/10.1016/j.jhealeco.2006.10.011

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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.

Item Type: Article
Keywords: two-tier charging, public-private mix, equity, DEMAND, MODEL, Fees and Charges, trends, Great Britain, Health Services Accessibility, Hospitals, Public, Resource Allocation, State Medicine
Faculty and Department: Faculty of Public Health and Policy > Dept of Global Health and Development
PubMed ID: 17147962
Web of Science ID: 246421700002
URI: http://researchonline.lshtm.ac.uk/id/eprint/9549

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