Health Economics: An Industrial Organization Perspective

by Martinez-giralt; Xavier

• ISBN13: 9780415559898
• ISBN10: 0415559898
• Edition: 1st
• Format: Nonspecific Binding
• Copyright: 2012-01-25
• Publisher: Routledge

Summary

Research in Health Economics has developed into a separate discipline for the last 25 years. All this intense research activity, has translated in the inclusion of courses of health economics, mostly at graduate level. However, the Industrial Organization aspects of the health care market do not occupy a central place in those courses. We propose a textbook of health economics whose distinguishing feature is the analysis of the health care market from an Industrial Organization perspective. This textbook will provide teachers and students with a reference to study the market structure aspects of the health care sector. The book is structured in three parts. The first part will present the basic principles of economics. It will bring all readers to the required level of knowledge to follow subsequent parts. Part II will review the main concepts of health economics. The third part will contain the core of the book. It will present the industrial organization analysis of the health care market, based on our own research.

Author Biography

Pedro Luis de Oliveira Martins Pita Barros is Professor of Economics at the Universidade Nova de Lisboa, Portugal. Xavier Martinez-Giralt is Professor of Economics in the Department of Economics and Economic History at the Universitat Autnoma de Barcelona, Spain.

Table of Contents

List of figures	p. xi
List of tables	p. xiii
Preface	p. xiv
Notations	p. xv
Acknowledgments	p. xvii
Principles of economics	p. 1
Introduction	p. 3
Demand	p. 5
The elements of the consumer problem	p. 6
Demand function	p. 9
Market demand	p. 21
Supply	p. 23
Introduction	p. 23
The set of production possibilities	p. 23
The production function	p. 23
The cost function	p. 27
Technical rate of substitution and elasticity of substitution	p. 28
Marginal and average cost functions	p. 30
An example: the Cobb-Douglas production function	p. 31
Returns to scale, economies of scale, and economies of scope	p. 32
Variable and fixed costs	p. 34
Opportunity cost	p. 34
Supply	p. 35
Markets	p. 39
The perfectly competitive market	p. 40
Imperfect competition	p. 46
Regulation	p. 61
Natural monopoly	p. 62
The Averch-Johnson effect	p. 65
Multi-product monopolist	p. 67
Public firms	p. 68
Public goods	p. 69
Externalities	p. 70
Asymmetric information	p. 73
Yardstick competition	p. 78
Competition for the market	p. 80
Instruments	p. 80
Regulating the health care market	p. 82
Mergers and acquisitions	p. 85
Introduction	p. 85
Horizontal mergers	p. 86
Vertical mergers	p. 91
Conglomerate mergers	p. 95
M&A failure	p. 96
For-profit and nonprofit organizations	p. 99
Why do nonprofit organizations exist?	p. 100
Modeling nonprofit organizations	p. 101
Empirical evidence	p. 110
What do nonprofit hospitals maximize?	p. 111
Health care	p. 113
Essential concepts in health economics	p. 115
Differential characteristics of health economics	p. 118
The organization of the health care market	p. 120
Structure of a health care system	p. 122
Demand for health and health care	p. 127
Value of life and of quality of life	p. 127
Demand for health	p. 134
Insurance	p. 159
Basic concepts	p. 159
Risk and uncertainty	p. 162
Insurance	p. 166
Contracts and asymmetric information	p. 179
The problem of information	p. 179
Imperfect information and competition	p. 183
Incentives in the health care sector	p. 183
Asymmetric information and conflict of objectives	p. 186
Time-consistent contracts	p. 204
Supplier-induced demand	p. 209
IO in health care	p. 215
Competition in health care markets	p. 217
Payment systems	p. 217
Upcoding	p. 225
Competition on quality	p. 227
Technology adoption and the medical arms' race	p. 237
Public and private provision	p. 241
Mixed markets	p. 241
Public-Private Partnerships	p. 245
Moonlighting	p. 252
Bargaining	p. 255
A primer in bargaining theory	p. 255
Bargaining in health care markets	p. 260
The institutional setting	p. 270
Bargaining within a national health service	p. 273
Ways to enhance bargaining power	p. 281
Empirical evidence	p. 284
Waiting lists	p. 287
The mechanics of waiting lists	p. 288
Waiting time as an equilibrium device	p. 290
Selecting from a waiting list	p. 292
The perverse incentives of waiting lists	p. 293
Policy interventions aimed at waiting lists	p. 295
Referrals, gatekeeping, and levels of care	p. 297
The referral externality	p. 298
Vertical integration vs. market mechanism	p. 299
Gatekeeping	p. 303
Pharmaceutical market	p. 305
R&D and patents	p. 305
Market access	p. 306
International reference pricing	p. 307
Making sense of phase IV trials	p. 310
Generics substitutions	p. 310
Domestic reference pricing	p. 311
The generics paradox	p. 313
Retail pharmacy	p. 315
Notes	p. 319
References	p. 323
Index	p. 337
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