Health Insurance and Competition in Health Care Markets

摘要: I study duopolistic market for differentiated medical products. Medical providers decide whether to sell on the spot sick consumers or through competitive insurance healthy consumers. While shopping know only distribution of possible needs they may have if get sick. Only when getting their actual need reveals and diagnosed. Hence lower taste differentiation than who are market. find that in equilibrium market, even though this intensifies competition because differentiation. Competition between under sales brings premiums low enough motivate buying both Insurance generate efficient horizontal product differentiation, prices, efficiently higher quality.