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Does Competition Improve Service Quality? The Case of Nursing Homes Where Public and Private Payers Coexist

Competition plays an ambiguous role in nursing home markets where public and private payers coexist. Using U.S. nursing home data with a wide range of market structures, we find a U-shaped relationship between competition and service quality when nursing homes serve a mix of public and private segments, and a monotonically increasing relationship when nursing homes mostly serve the public, price-regulated, segment. The outcomes can be explained by the interplay of two opposing effects of competition: the reputation-building effect, whereby competing firms choose high quality to build a good reputation, and the rent-extraction effect, whereby competition hinders investment for quality improvements by lowering price premia. These observations are consistent with a repeated game model that incorporates public and private-payer segments.

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Informasi Detail

Judul Seri

MANAGEMENT SCIENCE; Vol.67 No.10 October 2021

No. Panggil

-

Penerbit

: .,

Deskripsi Fisik

p. 6493-6512

Bahasa

English

ISBN/ISSN

-

Klasifikasi

NONE

Tipe Isi

-

Tipe Media

-

Tipe Pembawa

-

Edisi

-

Subjek

COMPETITION
SERVICE QUALITY
RENT EXTRACTION
MEDICARE
NURSING HOMES
MIXED QUALITY
MIXED PAYERS
REPUTATION BUILDING
MEDICAID

Info Detail Spesifik

-

Pernyataan Tanggungjawab

Susan Feng Lu, Konstantinos Serfes, Gerard Wedig, Bingxiao Wu

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