title: Hospital nonprice competition and Medicare reimbursement policy.
abstract: This paper analyzes the role of interhospital nonprice competition in Medicare's Prospective Payment System. Competition can play an important role both by increasing quality and reducing managerial slack. The quality-enhancing aspect of competition can be amplified through reimbursement of a proportion of incurred cost. As competition intensifies, the optimal degree of cost sharing (subsidy) falls.
mesh_terms: D003365:Costs and Cost Analysis; D004465:Economic Competition; D004469:Economics, Hospital; D004526:Efficiency; D007182:Income; D008389:Marketing of Health Services; D006278:Medicare / Q000191:economics*; D015233:Models, Statistical; D011445:Prospective Payment System / Q000191:economics*; D011787:Quality of Health Care / Q000191:economics; D014481:United States