Hospital quality, wages and union behavior: a spatial analysis

This paper analyzes quality choice of hospitals subject to the union structure. For this purpose we extend the spatial two hospital competition model developed by Montefiori (Eur J Health Econ 6:131–135, 2005 ). We investigate the impact of different spatial wage bargaining schemes—(1) every hospita...

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Bibliographic Details
Published inLetters in spatial and resource sciences Vol. 9; no. 1; pp. 9 - 17
Main Authors Andree, Kai, Schwan, Mike
Format Journal Article
LanguageEnglish
Published Berlin/Heidelberg Springer Berlin Heidelberg 01.03.2016
Subjects
Agricultural Economics
Demography
Economics
Economics and Finance
Environmental Economics
Geographical Information Systems/Cartography
Landscape/Regional and Urban Planning
Original Paper
Regional/Spatial Science
I11
J31
D43
Quality competition
Duopoly
Unions
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Summary:This paper analyzes quality choice of hospitals subject to the union structure. For this purpose we extend the spatial two hospital competition model developed by Montefiori (Eur J Health Econ 6:131–135, 2005 ). We investigate the impact of different spatial wage bargaining schemes—(1) every hospital has a separate union and (2) one overall union for all hospitals in the spatial market. We find that if every hospital has a separate union wages are higher and the hospital’s quality is lower than in the case of one overall union which negotiate the same wage for personnel in all hospitals. Furthermore we show, in the separate union case that the health insurance has to pay a higher amount to ensure the same quality level. Finally we demonstrate that one overall union case is more efficient to the health insurance to increase the hospital’s quality. If the health insurance is part of the social security system the policymaker can possibly set a law framework for negotiations to obtain the efficient case.
ISSN:1864-4031
1864-404X
DOI:10.1007/s12076-014-0128-9