Healthcare and the Competitive Market Structure Essay

The U.S. health care system is way more complex than what meets the eye. A major difference between the health care system in the U.S. and other nations, is that the U.S. does not have universal health care. Lack of a universal health care opens up the doors for competition amongst insurance, physicians, technology, hospitals and outpatient services.

Free markets which would allow patients more choices for health care coverage could also lower cost. Free market health care is a term used to define the choice a person has to buy insurance from anyone they please, regardless of state or employment . It is sold without government regulations, control, oversight or licensing. If you are paying for a service, shouldn’t you have the right to choose who you are purchasing that service from ? Why should government have a say in where and who you can buy your insurance from? In the State of North Carolina, we operate under a regulatory committee called the Certificate of Need (CON). According to the National Conference of State Legislature, the CON , is a program aimed at restraining health care facility cost and allowing coordinated planning of new services and construction. In North Carolina the state can’t dictate where you can build, what services you can offer and if they are valid. These services have already been researched by the organizations applying for the CON,

High concentration in the market, as we all know, leads to market inefficiency, where insurers are able to set inadequate or unfairly discriminatory premium rates. Few oligopoly firms operating in the statewide markets are definitely to use market power for their advantages. These can be tightening barriers to entry what some of the US health insurers have been doing. For instance, large insurance companies like UnitedHealth Group, WellPoint and Aetna have been acquiring existing smaller health insurers without developing their own networks and products. These acquisitions tend to decrease competition and thus making insurance market more concentrated. On the other hand, there are more of the few ways of getting rid of competitors, one of them being through cost-efficiency. As far as Choi and Weiss (2005) concerned, cost-efficient firms are able to minimize cost and thus charge lower prices than competitors, which

Carol Liebau discusses in her article, “ObamaCare Limits Patient Choice”, that hospitals such as Cedars-Sinai and the Mayo Clinic are high-priced and under competitive pressure because of Obamacare. Insurance corporations are in a larger hurry than ever to cut costs (Liebau). However, Americans are coming to realize that those hospitals aren't just thoughtless profit centers. They are pricey because they provide advanced medical care or they offer the specialized treatments that the most ill patients require. Many Americans who had plans they could afford and had access to leading healthcare providers, find that under ObamaCare, they are being excluded from high-quality care unless they want to pay much more for

Critics believe that the present functioning of managed-care is degenerative to health care. Managed-care firms control costs by requiring patients to use a “network” of approved doctors and hospitals, and by reviewing the actions of doctors. Patients have to pay more to visit a doctor who does not participate in the “network.” Managed-care firms second-guess doctors, considering only the costs. Patients are often prevented from visiting specialists to reduce costs. A managed-care company might insist that its doctors prescribe inexpensive generic drugs instead of commercial products. Many patients must, also, receive the insurer’s approval before undergoing treatments or operations. HMOs have been criticized for refusing to pay when a patient goes

In the current U.S. system the free market prevails and companies, in this case, major insurance providers “compete” for business. This competitive business approach should in theory drive costs down. For some reason, however, an argument can be made that it has produced the opposite result in profiteering. The nation’s largest insurer, UnitedHealth, boasted over a 10 percent revenue increase in 2013 according to Forbes (2013). Health insurance affordability contributes to the disparity in access to health care, as evidenced by the fact that there are millions that are still uncovered. A greater majority of certain minorities lack both health insurance and the financial resource to seek out either health care or insurance. While insurance companies reap huge profits the percent of private sector companies offering health insurance has dropped to less than 50 percent (Kaiser, 2013). There is decidedly a lack of coordination of care for this at risk population as well, since treatment is rendered sporadically and with continuously changing providers. The last major challenge is that of improving the quality of health care. According to a 2010 report by the U.S. Department of Health and Human Services, Office of Inspector General (OIG), an estimated 13.5 percent of Medicare beneficiaries experienced adverse events during their hospital stay and an additional 13.5 percent experienced a temporary

Both market-based and government-financed health care systems strive to manage overall health care costs. The difference lies in the way they approach the task. Market-based health care relies primarily on the force of companies competing against each other to bring the best new products to customers. Customers make their choices based on many variables such as quality, convenience and service, not just cost. Most

Regulations that prevent insurance companies from participating in interstate commerce have caused competition to grow stagnant in the United States. This lack of competition has allowed the adoption of wasteful procedures by healthcare providers, which in turn passes the increased expenses back to the insurance companies. Therein, insurance costs increase, crippling consumer’s cash flow and quality of life. While healthcare costs continue to rise, people must scrutinize the current healthcare system.

There should be a public option available in health care and the government should have control over the industry. Backing up a bit, what is wrong with the health care system in the first place to cause such an enormous reform?

Some major reasons that a free, unregulated market in medical care might night be optimal are: Imperfect information, asymmetric information, barriers to entry, and third-party payers.

price, quality, convenience, and superior products or services); however, competition can also be based on new technology and innovation. A key role of competition in health care is the potential to provide a mechanism for reducing health care costs. Competition generally eliminates inefficiencies that would otherwise yield high production costs, which are ultimately transferred to patients via high health service and delivery costs. With so much competition going on in the healthcare field and around the healthcare organization of my choosing, reducing cost for the patients will keep my organization in the competition for more patients to come

The health sector is among the most important sectors in the United States economy. The government has enacted certain laws that affect the corporation’s activities and the insurance industry in general. The regulation affects competition among the health insurance companies, and the insurance industry in general.

There are many different forms of competition among health care organizations. Some of them are the prices of services, different co-pays someone will have to pay out of pocket, lower premiums, they have to be competitive in the quality of the service in which they perform daily. The health care competition is being advertised every day. The competitive nature of business cause them to reach out to the community. The health care industry has to fight for the approval of the community, the government, the insurance companies, the pharmaceutical companies and of course the stake holders as well as future investors.

In all industries, competition among businesses has long been encouraged as a mechanism to increase value for patients. In other words, competition ensures the provision of better products and services to satisfy the needs of customers (Glover & Rivers, 2009). In the health care industry, competition has an impact on many relational perspectives. There have been several studies examining the relationships between competition and quality of health care, competition and health care system costs, and competition and patient satisfaction. Some elements of competition in health care are price, quality, convenience, and superior products and

Analyze the current health care delivery structure in your state. Compare and contrast the major determinants of healthcare market power.