Brekke, Kurt R.; Siciliani, Luigi; Straume, Odd Rune - Institutt for samfunnsøkonomi, Norges Handelshøyskole … - 2012
We study the incentives for hospitals to provide quality and expend cost-reducing effort when their budgets are soft, i ….e., the payer may cover deficits or confiscate surpluses. The basic set up is a Hotelling model with two hospitals that differ … in location and face demand uncertainty, where the hospitals run deficits (surpluses) in the high (low) demand state …