title: Competition and quality in a physiotherapy market with fixed prices.
abstract: Our study focuses on competition and quality in physiotherapy organized and regulated by the Social Insurance Institution of Finland (Kela). We first derive a hypothesis with a theoretical model and then perform empirical analyses of the data. Within the physiotherapy market, prices are regulated by Kela, and after registration eligible firms are accepted to join a pool of firms from which patients choose service providers based on their individual preferences. By using 2SLS estimation techniques, we analyzed the relationship among quality, competition and regulated price. According to the results, competition has a statistically significant (yet weak) negative effect (p = 0.019) on quality. The outcome for quality is likely caused by imperfect information. It seems that Kela has provided too little information for patients about the quality of the service.
authors.affiliation: Social Insurance Institution of Finland, PL 450, 00101, Helsinki, Finland. piia.pekola@kela.fi.
authors.forename: Piia
authors.identifier: http://orcid.org/0000-0002-5941-4262
authors.initials: P
authors.lastname: Pekola
authors.affiliation: National Institute for Health and Welfare, PL 30, 00271, Helsinki, Finland.
authors.forename: Ismo
authors.initials: I
authors.lastname: Linnosmaa
authors.affiliation: Social Insurance Institution of Finland, PL 450, 00101, Helsinki, Finland.
authors.forename: Hennamari
authors.initials: H
authors.lastname: Mikkola
mesh_terms: D004465:Economic Competition; D005387:Finland; D006801:Humans; D018803:Models, Economic; D026741:Physical Therapy Modalities / Q000191:economics* / Q000592:standards*; D011787:Quality of Health Care / Q000191:economics* / Q000592:standards*
keywords: Competition; Imperfect information; Physiotherapy; Price regulation; Quality