Competition in Health Care Markets

Martin Gaynor and Robert Town

No 17208, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper reviews the literature devoted to studying markets for health care services and health insurance. There has been tremendous growth and progress in this field. A tremendous amount of new research has been done in this area over the last 10 years. In addition, there has been increasing development and use of frontier industrial organization methods. We begin by examining research on the determinants of market structure, considering both static and dynamic models. We then model the strategic determination of prices between health insurers and providers where insurers market their products to consumers based, in part, on the quality and breadth of their provider network. We then review the large empirical literature on the strategic determination of hospital prices through the lens of this model. Variation in the quality of health care clearly can have large welfare consequences. We therefore also describe the theoretical and empirical literature on the impact of market structure on quality of health care. The paper then moves on to consider competition in health insurance markets and physician services markets. We conclude by considering vertical restraints and monopsony power.

JEL-codes: I11 I18 L10 L13 L30 L40 (search for similar items in EconPapers)
Date: 2011-07
New Economics Papers: this item is included in nep-com, nep-hea and nep-ind
Note: EH
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (184)

Published as Gaynor, M and Town, R. (2011) “Provider Competition,” in Handbook of Health Economics, Vol 2, Borras, P., McGuire, T. and Pauly, M., eds., Amsterdam: Elsevier.

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Related works:
Working Paper: Competition in Health Care Markets (2012)
Chapter: Competition in Health Care Markets (2011)
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