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    Predicting hospital behavior

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    How do you explain and predict hospital behaviors if using the utility-maximizing (quality - quantity) and physician control models, individually? (Please use figures/graphs to explain the models).

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    Quantity-Quality Model was developed by Newhouse (1970). He proposed that hospitals are biased against producing low-quality products, which profit-maximizing firms would likely offer. Their utility is measured both they the quantity of patients discharged and the quality of care they receive. A tradeoff exists between quality and quantity because the hospital has limited resources. See the attached file "hospital." It shows how the ...

    Solution Summary

    This solution discusses predicting hospital behavior using the utility-maximizing and physician control models.