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.

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.

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

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 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?

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

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.

Governnment intervention in health care markets can be supported by two separate and independent reasons, market failure and equity. Firstly I will consider market failures, such failures in health care and insurance markets include asymmetric information, market power, and principal agent problems. In some cases the aforementioned failures can be resolved by the private sector however concerning certain failures government intervention is required.

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

This Issue Brief examines issues related to managed competition and the use of a health insurance exchange for the purpose of addressing cost, quality, and access to health care services. It discusses issue that must be addressed when designing an exchange in order to reform the health insurance market and also examines state efforts at health reform that use an exchange. The basic component of managed competition is the creation an organized marketplace that brings together health insurers and consumers (either as individuals or through their employers).The sponsor of the exchange would set "rules of engagement" for participating insurers and offer consumers a menu of choices among different plans. Ultimately, the goal of a health insurance exchange is to shift the market from competition based on risk to competition based on price and quality.Among the issues that need to be addressed if an exchange that uses managed competition has a realistic chance of reducing costs, improving quality, and expanding coverage:

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

A free market alternative offers individuals the opportunity to have a say in their healthcare coverage. Insurance companies have certain needs and interests that will never line up with consumer needs and interests. Insurance companies are rapidly increasing the cost of healthcare. At the same time they are lowering the coverage of healthcare. There is nothing worse than becoming seriously ill and then receiving an unexpected bill from your provider. The current health system that we now have continues to leave millions of Americans uninsured or underinsured. Free market health care would reduce the costs based on competition and could potentially lead to an improvement in the efficiency of the health care system. Although there are many debates in regards to a free market alternative, it would drive costs down. A free market will only work when the consumer can use buying power to influence the price and quality of goods. There will never be a perfect health system that will please each and every person. However, with such a huge debate regarding today’s healthcare system, consumers deserve to have a say in the type of healthcare coverage that they are being forced to have or risk being

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

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,

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.