According to the medical arms race hypothesis hospitals compete on the basis of:
a. costs.
b. costs and price.
c. quality.
d. (b) and (c) are correct.
What is your answer?
(c) quality
Right.
To answer this question, we need to understand the medical arms race hypothesis and analyze the basis on which hospitals compete.
The medical arms race hypothesis suggests that hospitals compete with each other by trying to attract patients, healthcare professionals, and funding in a resource-intensive manner. In this context, the competition is primarily driven by the desire to acquire more resources and improve their market share.
Now let's analyze the provided options:
a. costs: While hospitals do compete based on costs to some extent, it is not the only basis for competition. Hospitals may try to offer lower costs to attract patients or negotiate better prices with insurance companies, but this does not capture the full extent of competition.
b. costs and price: This option combines the competition based on costs and price. It acknowledges that hospitals may compete not only on costs but also on the prices they charge to patients and insurance companies. However, it does not capture the full spectrum of competition.
c. quality: Hospitals also compete based on the quality of care they provide. In a healthcare market, quality is an essential factor in attracting patients and healthcare professionals. Hospitals may invest in advanced technology, recruit highly skilled doctors, or implement quality improvement initiatives to differentiate themselves from competitors.
d. (b) and (c) are correct: This option acknowledges that hospitals compete on both costs and price, as well as quality. It represents a more comprehensive understanding of the medical arms race hypothesis and its implications.
Based on the explanations above, the correct answer is d. (b) and (c) are correct, as hospitals compete on both costs and price, as well as quality.