The industrial organization of health care markets
In: Handbook of Health Economics
Health care markets fail to satisfy many requirements for perfect competition, including large numbers of consumers and firms, zero search costs, and marketability of all goods and services. Over time, health care markets have evolved to overcome the resulting inefficiencies. We combine the theory of agency with a model of monopolistic competition to explore three regimes of health care organization that were dominant at different points in time: (1) independent physicians and cost-based reimbursement for hospitals; (2) regulation; and (3) managed care. Each regime represents, for its time, a sensible response to market failure. Each regime has predictable consequences for prices, costs, and quality. We examine the theoretical arguments and review the empirical evidence about each regime. A consistent message emerges: Providers respond to economic incentives in a manner consistent with theory.
|This chapter was published in: ||This item is provided by Elsevier in its series Handbook of Health Economics with number
1-20.||Handle:|| RePEc:eee:heachp:1-20||Contact details of provider:|| Web page: http://www.elsevier.com/wps/find/bookseriesdescription.cws_home/BS_HE/description|
When requesting a correction, please mention this item's handle: RePEc:eee:heachp:1-20. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.