Balancing between competition and regulation in healthcare markets

Maria Trottmann*, Piet Stam, Johan Visser, Shuli Brammli-Greenberg

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

Systems of managed competition naturally seek the middle ground between competition and regulation. This debate essay makes the case for adjusting the level of regulation according to the characteristics of the submarket in question. We first develop a theoretical framework that can be used to identify the services in which relatively free competition will be beneficial. The framework is grounded in the economic literature and consists of eight criteria. Targeted regulatory tools are then discussed that can be used to structure submarkets in which these criteria are not (fully) met. Applying this framework and targeted interventions, regulators gain the flexibility to react to potential market failures, without foregoing the benefits of managed competition where it works well. This analysis is highly relevant for countries in transition to managed competition. Regulators can identify potential failure in submarkets for medical services, and apply the necessary regulatory tools to prepare for a smooth transition.

Original languageAmerican English
Pages (from-to)1-10
JournalHealth Economics, Policy and Law
Early online date21 Dec 2023
DOIs
StateE-pub ahead of print - 21 Dec 2023

Bibliographical note

Publisher Copyright:
Copyright © The Author(s), 2023. Published by Cambridge University Press.

Keywords

  • healthcare system design
  • insurer competition
  • managed competition
  • provider competition

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