Product differentiation and welfare in a mixed duopoly with regulated prices: the case of a public and a private hospital

Hospital markets are often characterised by price regulation and the existence of different ownership types. Using a Hotelling framework, this paper analyses the effect of different objectives of the hospitals on quality, profits, and overall welfare in a price regulated duopoly with symmetric locations. In contrast to other studies on mixed oligopolies, this paper shows that in a duopoly with regulated prices privatisation of the public hospital may increase overall welfare depending on the difference of the hospitals' marginal costs and the weight of the additional public hospital's motive. --mixed oligopoly,price regulation,quality,hospital competition

Does Higher Cost Inefficiency Imply Higher Profit Inefficiency? - Evidence on Inefficiency and Ownership of German Hospitals

This paper investigates cost and profit efficiency of German hospitals. More specifically, it deals with the question how hospital efficiency varies with ownership, patient structure and other exogenous factors, which are neither inputs nor outputs of the production process. We conduct a Stochastic Frontier Analysis (SFA) on a multifaceted administrative German dataset combined with the balance sheets of 374 hospitals for the years 2002 to 2005.The results indicate that private (for-profit) and (private) non-profit hospitals are on average less cost efficient but more profit efficient than publicly owned hospitals.Hospital efficiency, ownership, stochastic frontier analysis, profit function

In vino veritas: Theory and evidence on social drinking

It is a persistent phenomenon in many societies that a large proportion of alcohol consumption takes place in company of other people. While the phenomenon of social or public drinking is well discussed in disciplines as social psychology and anthropology, economists have paid little attention to the social environment of alcohol consumption. This paper tries to close this gap and explains social drinking as a trust facilitating device. Since alcohol consumption tends to make some people (unwillingly) tell the truth, social drinking can eventually serve as a signaling device in social contact games. Empirical support is obtained from a cross-country analysis of trust and a newly developed index of moderate alcohol consumption. --social and public drinking,alcohol consumption,social contact games,trust,signaling

Stabilität und Wandel von Arbeitsmarktinstitutionen aus wettbewerbsökonomischer Sicht

Dieser Beitrag fasst die Ergebnisse unserer industrieökonomischen, theoretischen Forschung zur Fragestellung von Stabilität und Wandel von Arbeitsmarktinstitutionen zusammen. Wir verfolgen dabei einen wettbewerbsökonomischen Forschungsansatz, der Marktmacht sowohl auf Arbeits- als auch auf Absatzmärkten unterstellt. In der Literatur hat sich hierfür der Begriff unionised oligopolies eingebürgert. Damit wird zum Ausdruck gebracht, dass die untersuchte Klasse von Modellen einerseits Verhandlungsmacht auf Arbeitsmärkten und andererseits unvollständigen Wettbewerb und somit Marktmacht auf Absatzmärkten berücksichtigt. Kern ist die Analyse der Wechselwirkungen zwischen Organisationsformen auf Arbeitsmärkten und Wettbewerbsverhältnissen auf Produktmärkten. Dabei analysieren wir aktuelle Entwicklungen auf dem deutschen Arbeitsmarkt wie die Einführung sektorspezifischer Mindestlöhne, die Rolle von Spartengewerkschaften, Formen der Gewinnbeteiligung von Arbeitnehmern sowie internationale Wettbewerbsaspekte wie die Verlagerung der Produktion durch internationale Unternehmen ins Ausland. -- This contribution gives an overview of the main results of our theoretical research on the stability and change of labour market institutions. We use so-called models of unionised oligopolies which are borrowed from the theory of industrial organization in order to analyse the effects of simultaneous market power in both labour and product markets. The focus of our research is on the interaction between various organisational structures of labour markets and different forms of product market competition. In particular, we analyse some current developments in Germany, such as the introduction of sector-specific minimum wages, the formation of craft unions, the increasing number of profit sharing contracts as well as the relocation of production facilities to foreign countries in the context of globalisation.

More cost-sharing, less cost? Evidence on reference price drugs

This paper evaluates the causal effects of changes in reference prices (RP) on prices, copayments, and overall expenditures for off-patent pharmaceuticals. With reference pricing, firms set prices freely and the health plan covers the expenses only up to a certain threshold. We use quarterly data of the German market for anti-epileptics at the package level and at the active substance level and exploit that the RP has been adjusted in some of the active substances but not in others in a difference-in-differences framework. At the product level, we find that a lower RP reduces prices for both brand-name drugs and generics, but leads to higher copayments, especially for brand-name drugs. At the aggregate level, we find that a lower RP leads to savings for the public health insurer since revenues decrease substantially for brand-name firms and, to a lesser extent, also for generic firms. Overall expenditures (payments by the health insurer and the patients) for brand-name drugs decrease in proportion to the decrease in the RP, while the adjustment does not significantly influence overall expenditures for generics

Regionalität: Wettbewerbliche Überlegungen zum Krankenhausmarkt

In den letzten Jahren haben die durch das Bundeskartellamt behandelten Fusionskontrollverfahren im Krankenhaussektor zu einer anhaltenden wettbewerbsökonomischen Debatte geführt. Als eine wichtige Erkenntnis hat sich hierbei ergeben, dass für den überwiegenden Bereich der akutstationären Krankenhausversorgung von einer vergleichsweise engen räumlichen Marktabgrenzung auszugehen ist, der Wettbewerb zwischen Krankenhäusern daher in der Region ausgetragen wird. Das vorliegende Papier untersucht Regionalität und Krankenhauswettbewerb unter verschiedenen Aspekten: Insbesondere beleuchten wir die marktverschließenden Wirkungen der dualistischen Krankenhausfinanzierung, gehen auf die besondere Problematik von Krankenhäusern in der Fusionskontrolle ein und arbeiten das Ob und Wie wesentlicher Konsequenzen von Regionalität in der Versorgung mit Krankenhausleistungen heraus. Zudem greifen wir den Vorschlag der Monopolkommission auf, die Fusionskontrolle im Krankenhausbereich zu verschärfen, um der Regionalität der Krankenhausmärkte gerecht zu werden. -- The increasing number of hospital mergers over the last few years has lead to some debate over the form and degree of competition between hospitals. An important conclusion has been that the geographic definition of the relevant market should be rather narrow when considering inpatient care units. Thus, competition between hospitals takes place in the region. This paper analyses regionalism and hospital competition, highlighting several aspects: We shed light on the market-foreclosing effects of the dual financing system, discuss the special features of hospitals within the German merger control regime and underline the consequences of regionalism for the provision of hospital care. In addition, we follow the proposal made by the German Monopolies Commission to strengthen the merger control regime in order to subject more regional mergers to merger control.

Wettbewerbspotenziale im deutschen Apothekenmarkt

Der vorliegende Beitrag analysiert den Ordnungsrahmen für den deutschen Apothekenmarkt und die dortigen Konkurrenzbeziehungen, welche durch signifikante Wettbewerbsdefizite gekennzeichnet sind. Ausgehend von unserer Diagnose und den Befunden werden die Vor- und Nachteile von zwei Therapieoptionen als diskutiert: Das sogenannte Selektivertragsmodell, bei dem Apotheken um das Kollektiv der Versichertengemeinschaft einer jeden Krankenkasse konkurrieren, und das Modell der Apothekentaxe, bei dem die Patienten die Leistung der Apotheke direkt vergüten. Für das Modell der Apothekentaxe werden in drei Szenarien die Wettbewerbswirkungen und das mögliche Einsparpotenzial pro Jahr ermittelt, dass sich auf bis zu 448 Mio. EUR beläuft. -- This paper analyses the institutional framework for pharmacies in Germany and competition in that sector, which is characterized by significant competition deficits. Based on our diagnosis and findings the advantages and disadvantages of two therapies are discussed: The selective contracting model, where pharmacies compete for the collective group of all members of every health insurance company, and the pharmacy fee model, where patients have to directly pay for pharmacy services. For the latter model we analyze, under three different scenarios, the competitive effects and annual saving potentials which can amount up to 448 million euro.Apotheke,Wettbewerb,Gesundheitsausgaben,Effizienz,Nachhaltigkeit,pharmacies,competition,health-care expenditures,efficiency,sustainability

Financial incentives and prescribing behaviour in primary care

Many healthcare systems prohibit primary care physicians from dispensing the drugs they prescribe due to concerns that this encourages excessive, ineffective or unnecessarily costly prescribing. Using data from the English National Health Service for 2011 to 2018, we estimate the impact of physician dispensing rights on prescribing behaviour at the extensive margin (comparing practices that dispense and those that do not) and the intensive margin (comparing practices with different proportions of patients to whom they dispense). Our empirical strategy controls for practices selecting into dispensing based on observable (OLS, entropy balancing) and unobservable practice characteristics (2SLS). We show that physician dispensing raises drug costs per patient by 4.2%, which reflects more and more expensive drugs being prescribed, including potentially inappropriate substances such as opioids. Dispensing practices also prescribe smaller packages as reimbursement is partly based on a fixed fee per prescription dispensed. Similar effects are observed at the intensive margin