Is hospital competition good for patients? Typically,competition improves quality and lowers prices. BUT Ubiquity of insurance hinders price competition Patients are typically referred to hospitals by physicians,so hospitals compete for physicians Medical arms race hypothesis:greater competition among hospitals for physicians can result in redundancy in and overconsumption of medical technologies.This can actually increase costs without improving quality Lots of empirical research about the effect of hospital competition on patient outcomes:mixed findings and different policy implications. Bhattacharya,Hyde and Tu-HealthEconomicsBhattacharya, Hyde and Tu – Health Economics Is hospital competition good for patients? Typically, competition improves quality and lowers prices. BUT  Ubiquity of insurance hinders price competition  Patients are typically referred to hospitals by physicians, so hospitals compete for physicians  Medical arms race hypothesis: greater competition among hospitals for physicians can result in redundancy in and overconsumption of medical technologies. This can actually increase costs without improving quality  Lots of empirical research about the effect of hospital competition on patient outcomes: mixed findings and different policy implications