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Competition in Health Care Markets and Vertical Restraints

Author

Listed:
  • Baranes, E.
  • Bardey, D.

Abstract

This paper studies competition between Managed Care Organizations (MCOs) and Conventional Insurers. Most of the time, MCOs sign exclusive contracts with providers and these vertical restrictions associated to differentiation in the providers’ market imply a risk segmentation. Taking into account this phenomenon, we show that vertical restrictions in the health insurance sector can paradoxically create an anti-raise rivals’ cost effect in which MCOs’ penetration allows to decrease conventional insurers’ premiums.

Suggested Citation

  • Baranes, E. & Bardey, D., 2004. "Competition in Health Care Markets and Vertical Restraints," Cahiers du LASER (LASER Working Papers) 2004.13, LASER (Laboratoire de Science Economique de Richter), Faculty of Economics, University of Montpellier 1.
    • Handle: RePEc:mop:lasrwp:2004.13
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    File URL: http://www.laser.univ-montp1.fr/Cahiers/cahier130404.pdf
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    Cited by:

    1. Kassem HAMMOUD & Jaber ABDALLAH, 2019. "Empirical Analysis On Strategy And Hyper - Competition With Smes," Proceedings of the INTERNATIONAL MANAGEMENT CONFERENCE, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 13(1), pages 951-960, November.
    2. David Bardey & Giancarlo Buitrago, 2015. "Integraci√≥n vertical en el sector de la salud colombiano," Documentos CEDE 14069, Universidad de los Andes, Facultad de Economía, CEDE.
    3. Gaynor, Martin & Town, Robert J., 2011. "Competition in Health Care Markets," Handbook of Health Economics, in: Mark V. Pauly & Thomas G. Mcguire & Pedro P. Barros (ed.), Handbook of Health Economics, volume 2, chapter 0, pages 499-637, Elsevier.
    4. Salah M. Diab, 2014. "Using the Competitive Dimensions to Achieve Competitive Advantage A Study on Jordanian Private Hospitals," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 4(9), pages 138-150, September.

    More about this item

    Keywords

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    JEL classification:

    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies

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