Competition on health care markets –
differences from classical markets
Organization of health services
Competition on health care markets
- according to levels of provided health services
SYLLABUS of 3rd LECTURE
21. 10. 2019
PharmDr. Bc. Dana Mazankova, Ph.D.
Specificity of supply in health care market
Supply of health care is influenced by:
- total amount of health care facilities in particular locality
- concrete structure of these facilities
- health insurance companies` attitude for making contracts with
physicians and hospitals in particular locality
Limited amount of health care facilities
Pharmacies - supply is adequate
Hospitals - supply is adequate
- selection procedures
- monopoly
Another specifics of supply in health care market
• physicians` / pharmacists` scientific knowledge and professional skills
• „excessive services“
• excessive supply --- secondary demand for health care
• demand induced by a supply
Gatekeeping
- supply of health care service by the physicians in a hospital should be
realized only after recommendation the patient by a physician of
primary care
Formal absence of profit / gain motivation
- public sector organizations:
- benefit (= improving health care statut)
All health care facilities must receive payment (money) from some
„establishment“ for provided health care services
Received payment according to ownership of health care facilities
- statut of public hospitals
- obtain money from heath insurance companies
- hospitals owned by private holders
- obtain money from heath insurance companies
- hospitals owned by private holders („real“ private hospitals)
- only direct payment from patients
Absence of „above-standard“ definition
- above-standard health care
- definition of above-standard in non-health care areas
Health care divided into 2 parts:
1. standard health care
2. above-standard health care
- pharmacy system and selling drugs by pharmacists
- reimbursement of expended drugs and health devices in a pharmacy from
system of compulsory public health insurance
- dental (stomatology) care
- Rate Tariff of reimbursed and non-reimbursed dental servies
Specificity of product in health care market
• Uniform (homogenous)
production
Classical
„competitive“
market
• Non-uniform (nonhomogenous)
production
Market with health
care
Specificity of demand in health care market
- imperfectly informed buyers (= patients)
- patient`s „moral hazard“: Delegation of consumer sovereignity to
physician
- demand induced by a supply
Need for health care – 2 parts:
1. Subjective need
2. Objective need
→ health care policy of state
→ create: DEMAND for health care
- regulation of demand for health care aslo initated by physicians
Specificity of payment in health care market
• Consumers pay directlyClassical
„competitive“
market
• Consumers pay only part of
costs directly
Market with health
care
Organization of
health
services
- general physicians
(for children, for adults)
- dentists
- gynekologists
- pharmacies
- first aid
- home care (home hospic care)
1. Primary care --- locality
2. Secundary care --- district
- acute hospital care
- ambulatory specialists (allergologist,
orthopaedist, dermatologist, ophtalmologist, …)
- special health institutes
3. Tertiary care --- region
- hospitl care
- bed health-social care (rest homes)
- baths
Competition on heath care markets
1. Primary care
General physicians (for children, for adults), dentists, gynekologists
- amount of providers is not overlarge
- tools of non-price competition:
Pharmacies
- amount of pharmacies is not overlarge
- 1. price competition - tools:
- 2. non-price competition – tools:
2. Secundary care
Ambulatory specialists (allergologist, orthopaedist, dermatologist, ophtalmologist, …)
- amount of providers is overlarge
- competetive manners:
1. tools of non-price competition:
2. tools of price competition:
3. Tertiary care
Hospital care (hospitals)
- competetive manners:
1. tools of non-price competition:
2. tools of price competition: