EC248 Lecture Notes - Lecture 12: Health Canada, Marginal Cost, Public Good
Document Summary
Lesson 12: health care delivery hospitals and pharmeceuticals. Hospitals represent the largest sector in the health care system: accounted for 29. 6% of total health expenditures. There are four characteristics that distinguish hospitals: length of patient stay (long-term or short-term, type of hospital (community, teaching, psychiatric, ownership (private non-benefit, private for-profit, public, size (number of beds) Hospitals display two distinctive features compared to standard firms: a dominance of not-for-profit ownership, an unusually organizational structure. Incomplete vertical integration: physicians have a long-term relationship with a hospital but are neither employed by nor fully independent of the hospital. In most cases, hospitals were assumed to care about two dimensions of output: quantity, measured by the number of the patients treated, quality, conceptualized as intensity of servicing. Hospital markets are local: local monopoly power. Regulation and competition in local sector: a crucial part of the regulatory scheme is the funding method used by major players.
