European Health Policy - Markets and Competition in Healthcare System
Market and competition will improve the efficiency of healthcare production in a health system. Discuss
Economists believe that competition in any market is supposed to improve the productivity and efficiency of the market (Enthoven, 2004). Market is defined as any set of arrangement that allow buyers and sellers to communicate and thus arrange exchange of goods, services, or resources. Accordingly, a free market, is one in which the exchange of goods/ services and money as in price takes place without the intrusion of the government of the particular country where the market operates. Any market has two important stakeholders, a buyer or consumer and a producer. A buyer or consumer is an individual or group of people who pay money (price) to receive satisfaction in the form of a good or service. Whereas, a producer or a manufacturer is one who produces goods or provides services to meet the consumer’s demand (Green, 2002). Health ecomoists and policy maker considrer healthcare system as a market. However, before defining healh care system as a market, it is important to understand the concept of healthcare system and its various types existing in the world. A healthcare system is the organization and the method by which healthcare is provided. These systems differ from one country to another, and can be differentiated by the percentage of the finance that comes either fom public or private funds and whether the healthcare delivery is controlled privately or by the government (Rothgang, et al, 2005; Polder, et al, 1997). Healthcare systems can be divided in to three categories. In the first type, the state is responsible for regulation, funding, and provision of services and NHS is one example of this type. In such system, there is a proper hierarchical system, which implements the regulations (Rothgang, et al, 2005). The second type is the social insurance-type healthcare system that negotiates between sickness funds and service providers. In such
Economists believe that competition in any market is supposed to improve the productivity and efficiency of the market (Enthoven, 2004). Market is defined as any set of arrangement that allow buyers and sellers to communicate and thus arrange exchange of goods, services, or resources. Accordingly, a free market, is one in which the exchange of goods/ services and money as in price takes place without the intrusion of the government of the particular country where the market operates. Any market has two important stakeholders, a buyer or consumer and a producer. A buyer or consumer is an individual or group of people who pay money (price) to receive satisfaction in the form of a good or service. Whereas, a producer or a manufacturer is one who produces goods or provides services to meet the consumer’s demand (Green, 2002). Health ecomoists and policy maker considrer healthcare system as a market. However, before defining healh care system as a market, it is important to understand the concept of healthcare system and its various types existing in the world. A healthcare system is the organization and the method by which healthcare is provided. These systems differ from one country to another, and can be differentiated by the percentage of the finance that comes either fom public or private funds and whether the healthcare delivery is controlled privately or by the government (Rothgang, et al, 2005; Polder, et al, 1997). Healthcare systems can be divided in to three categories. In the first type, the state is responsible for regulation, funding, and provision of services and NHS is one example of this type. In such system, there is a proper hierarchical system, which implements the regulations (Rothgang, et al, 2005). The second type is the social insurance-type healthcare system that negotiates between sickness funds and service providers. In such