Health Economics: An Industrial Organization Perspective

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  • Edition: 1st
  • Format: Nonspecific Binding
  • Copyright: 2012-01-25
  • Publisher: Routledge

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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 figuresp. xi
List of tablesp. xiii
Prefacep. xiv
Notationsp. xv
Acknowledgmentsp. xvii
Principles of economicsp. 1
Introductionp. 3
Demandp. 5
The elements of the consumer problemp. 6
Demand functionp. 9
Market demandp. 21
Supplyp. 23
Introductionp. 23
The set of production possibilitiesp. 23
The production functionp. 23
The cost functionp. 27
Technical rate of substitution and elasticity of substitutionp. 28
Marginal and average cost functionsp. 30
An example: the Cobb-Douglas production functionp. 31
Returns to scale, economies of scale, and economies of scopep. 32
Variable and fixed costsp. 34
Opportunity costp. 34
Supplyp. 35
Marketsp. 39
The perfectly competitive marketp. 40
Imperfect competitionp. 46
Regulationp. 61
Natural monopolyp. 62
The Averch-Johnson effectp. 65
Multi-product monopolistp. 67
Public firmsp. 68
Public goodsp. 69
Externalitiesp. 70
Asymmetric informationp. 73
Yardstick competitionp. 78
Competition for the marketp. 80
Instrumentsp. 80
Regulating the health care marketp. 82
Mergers and acquisitionsp. 85
Introductionp. 85
Horizontal mergersp. 86
Vertical mergersp. 91
Conglomerate mergersp. 95
M&A failurep. 96
For-profit and nonprofit organizationsp. 99
Why do nonprofit organizations exist?p. 100
Modeling nonprofit organizationsp. 101
Empirical evidencep. 110
What do nonprofit hospitals maximize?p. 111
Health carep. 113
Essential concepts in health economicsp. 115
Differential characteristics of health economicsp. 118
The organization of the health care marketp. 120
Structure of a health care systemp. 122
Demand for health and health carep. 127
Value of life and of quality of lifep. 127
Demand for healthp. 134
Insurancep. 159
Basic conceptsp. 159
Risk and uncertaintyp. 162
Insurancep. 166
Contracts and asymmetric informationp. 179
The problem of informationp. 179
Imperfect information and competitionp. 183
Incentives in the health care sectorp. 183
Asymmetric information and conflict of objectivesp. 186
Time-consistent contractsp. 204
Supplier-induced demandp. 209
IO in health carep. 215
Competition in health care marketsp. 217
Payment systemsp. 217
Upcodingp. 225
Competition on qualityp. 227
Technology adoption and the medical arms' racep. 237
Public and private provisionp. 241
Mixed marketsp. 241
Public-Private Partnershipsp. 245
Moonlightingp. 252
Bargainingp. 255
A primer in bargaining theoryp. 255
Bargaining in health care marketsp. 260
The institutional settingp. 270
Bargaining within a national health servicep. 273
Ways to enhance bargaining powerp. 281
Empirical evidencep. 284
Waiting listsp. 287
The mechanics of waiting listsp. 288
Waiting time as an equilibrium devicep. 290
Selecting from a waiting listp. 292
The perverse incentives of waiting listsp. 293
Policy interventions aimed at waiting listsp. 295
Referrals, gatekeeping, and levels of carep. 297
The referral externalityp. 298
Vertical integration vs. market mechanismp. 299
Gatekeepingp. 303
Pharmaceutical marketp. 305
R&D and patentsp. 305
Market accessp. 306
International reference pricingp. 307
Making sense of phase IV trialsp. 310
Generics substitutionsp. 310
Domestic reference pricingp. 311
The generics paradoxp. 313
Retail pharmacyp. 315
Notesp. 319
Referencesp. 323
Indexp. 337
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