Change, consolidation, and competition in health care markets

Article Abstract:

The health care industry has been affected by mergers and acquisitions, and shifting alliances and contractual relations. A few big companies may come to dominate many markets. This leaves antitrust enforcement authorities with the task of assessing the implications of such changes for health care competition. The aim of policy should be to ensure that health care markets function efficiently, but the impact of policies is difficult to forecast since the industry is changing rapidly. There are plans to loosen the way that antitrust laws are applied to the industry, which would constrain antitrust bodies in their task of policing health care.

Health care industry, Health care reform

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Policy watch: developments in antitrust economics

Article Abstract:

Antitrust law has moved toward a case-by-case approach which may involve using the 'rule of reason'. Capping of retail prices was no longer automatically seen as illegal from 1997, for example, after a Supreme Court ruling. Antitrust authorities are seeking to predict the impact of business practices on competition, rather than using evidence on market share. This change in approach means that errors relating to the impact of business conduct can be reduced. The new approach takes longer and may cost more, but the disadvantages can be offset by the benefits.

Competition (Economics), Laws, regulations and rules

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Moral hazard and risk spreading in partnerships

Article Abstract:

Compensation arrangements with greater degrees of revenue sharing substantially reduce physician effort, indicating that shifting the physician payment method from fee-for-service to capitation will drastically reduce physician effort. An examination of the tradeoff between risk spreading and moral hazard using a unique dataset on medical group practice yielded these results. Risk aversion is found to lead to compensation arrangements, which spread risk through the greater sharing of revenues.

Research, Risk (Economics), Partnership, Partnerships, Revenue sharing

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