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Competition in Health Care Markets

Martin Gaynor () and Robert Town

Chapter Chapter Nine in Handbook of Health Economics, 2011, vol. 2, pp 499-637 from Elsevier

Abstract: This chapter 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 since the publication of the first volume of this Handbook. 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 chapter then moves on to consider competition in health insurance markets and physician services markets. We conclude by considering vertical restraints and monopsony power.

Keywords: health care; competition; markets; industrial organization; antitrust; competition policy; hospitals; health insurance; physicians (search for similar items in EconPapers)
JEL-codes: I11 L13 L10 L40 I18 L30 (search for similar items in EconPapers)
Date: 2011
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Related works:
Working Paper: Competition in Health Care Markets (2012) Downloads
Working Paper: Competition in Health Care Markets (2011) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:eee:heachp:2-499

DOI: 10.1016/B978-0-444-53592-4.00009-8

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