lecture 7 - competition and competition policy in markets for health care

Question 1

consequences minimum volume standards –> centralisation of complex surgery

Answer 1

1. economies of scale (quality improvements and/or cost reductions)
2. less competition (quality reductions and/or price increase)
3. less choice (increased travel time and less familiar hospital)

Question 2

integration and coordination: benefits vs. potential violation cartel prohibition

Answer 2

o For example, firms need to work together to improve quality of care but cannot work together when deciding what price they are going to ask for their products

Question 3

• Minimum volume standards lead to hospital consolidation:
  benefits vs. potential anticompetitive merger effects

Answer 3

If hospitals know they need to perform x amount of surgeries to improve quality, they might want to merge. Because that leads to bigger volume.

Question 4

important lessons from the US

Answer 4

• Increasing consolidation of physician practices & hospitals
  o (Strongly) reduced competition
  o Little evidence of the promised benefits
• Antitrust enforcement agencies, state governments, and private stakeholders should all contribute (Gaynor et al., 2017, JAMA)
  1. Maintaining health care market competitiveness
  2. Preventing anticompetitive practices
  3. Promoting entry by new competitors & removing barriers to entry
• NB: regulations aimed at protecting consumers may restrict competition
  o Certificate of need, restrictive licensing, “any willing provider”, …

Question 5

france

Answer 5

1. hospital patient choice: extensive
2. hospital competition on quality: yes
3. hospital competition on prices: no
4. GP choice and quality competition: extensive
5. hospital mergers: mostly approved
6. involvement of private providers: extensive

Question 6

germany

Answer 6

1. hospital patient choice: extensive
2. hospital competition on quality: yes
3. hospital competition on prices: no
4. GP choice and quality competition: extensive
5. hospital mergers: mostly approved
6. involvement of private providers: extensive

Question 7

netherlands

Answer 7

1. hospital patient choice: extensive
2. hospital competition on quality: yes
3. hospital competition on prices: yes
4. GP choice and quality competition: restricted
5. hospital mergers: mostly approved
6. involvement of private providers: extensive

Question 8

norway

Answer 8

1. hospital patient choice: extensive
2. hospital competition on quality: yes
3. hospital competition on prices: no
4. GP choice and quality competition: extensive
5. hospital mergers: very few cases
6. involvement of private providers: limited

Question 9

portugal

Answer 9

1. hospital patient choice: restricted
2. hospital competition on quality: limited
3. hospital competition on prices: no
4. GP choice and quality competition: limited by shortage of GP
5. hospital mergers: mostly approved
6. involvement of private providers: increasing

Question 10

key observations from detailed case study of health care systems

Answer 10

o Wider choice of hospitals is increasingly common
o Hospital competition takes different forms
o GP choice & competition policies can be controversial
o Most hospital mergers are cleared: concentration becomes stronger → Meeting 9
o Involvement of private providers is widespread