Market Concentration and Health Care System Delivery: Analysis of Insurance Markets, Integrated Delivery Systems, and Ethical Considerations
Overview
This paper examines the role of market concentration in health insurance contracting and hospital negotiations within the United States health care system. It analyzes how market power affects pricing and service quality, compares the US system to India's publicly funded model, discusses the Integrated Delivery System (IDS) as an alternative to traditional fee-for-service models, and introduces the ethical and legal complexities inherent in health care delivery.
What this essay covers
- Market concentration and its impact on health insurance pricing and market power
- Integrated Delivery System (IDS) as an alternative to traditional fee-for-service health care delivery
- Ethical and legal complexities in health care practice and patient-provider relationships
Preview
Health Care System
Name of Student
Institutional Affiliation
In contracting a hospital for a health plan, the aspect of market concentration plays a significant role. According to most researchers, there is a tendency to cover health insurance being on high concentration in the United States, Congressional Research Service [CRS], 2010. The element of market concentration is for determining various attributes such as market power and profitability, among other factors. For this reason, for the high level of health insurance, when big insurers try to flex their influence in insurance selling, there will be a distortion of the prices. When prices become distorted, therefore, there is a likelihood that there will be an ineffective standard of health insurance cover. Market concentration, however, does not directly translate to the use of market power by health insurers to hike prices or compromise the quality of services. There is an assumption that competition will raise the quality of services offered while stabilizing prices within certain conditions in the market. As compared to the US, the healthcare cost is free in India to the public.
The reason why market power might not be capitalized can result from the structure of the organization and governance of firms. However, in the health care system, the market is different from that of perfect market competition, Łyszczarz (2014). Thus, health firms will concentrate on other interests rather than taking advantage of their market power in the industry.