Hospital competition on the basis of technology acquisition can lead to welfare losses at the societal level. An example occurs when a high tech robotic surgery assistant is acquired by two competing hospitals. If the machine at hospital B is only used half the time and the machine at hospital A is only used one quarter of the available time, there may be unrealized efficiencies from having only one hospital use the high tech robotic surgery assistant.

Question

Quizplus · Accepted Answer

This scenario illustrates a form of competition that can lead to inefficiencies, such as duplication of expensive technology that is underutilized. This can result in higher healthcare costs without corresponding increases in patient care quality or accessibility, representing a welfare loss at the societal level.

Hospital Competition on the Basis of Technology Acquisition Can Lead