Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments July 15, 2021 erstellt
Description:
Our paper studies the role of the performance-based incentives in managing the effects of consolidation in healthcare markets. We consider a transition between the ``pre-merger'' market configuration where a payer manages a system with two competing hospitals and one of the two ``consolidated'' configurations: a horizontal consolidation under which both hospitals are run by the same management team and a vertical consolidation under which the payer directly manages one of the hospitals. Policymakers in the Federal Trade Commission, and Centers for Medicare and Medicaid Services in the U.S., the Trust Development Authority, and Clinical Commissioning Groups in the NHS England will benefit from our analysis of the performance-based incentives in the presence of increasing market consolidation. We use queueing dynamics to describe patient care processes and analyze Nash equilibria emerging in different market configurations in the presence of performance-based incentives. We derive the optimal bonus-type incentives that the payer can use to adapt to changes in market concentration and quantify the resulting impact on patient access to care and social welfare. We identify the market conditions where bonus-type incentives are effective in generating the socially-optimal levels of patient access to care, as well as settings where changes in the market concentration create welfare gaps. The strength of competition for patient demand and the operating costs are two major factors shaping the access and welfare outcomes of market consolidation. Our analysis advises policymakers and payers on how to use performance incentives to blunt the anti-competitive effects of horizontal consolidation, and to enhance the effects of vertical consolidation on patient access to care and social welfare