Essay Sample on Healthcare Market Competition

Published: 2022-03-23
Essay Sample on Healthcare Market Competition
Type of paper:  Essay
Categories: Marketing Healthcare
Pages: 5
Wordcount: 1248 words
11 min read

The healthcare market is complex and diverse to comprehend without carrying out a thorough analysis. The healthcare market despite its complexity, is an essential asset to any society, since the products, and the outcomes of the market are critical for the development of an economy. Competition is highly encouraged in any market since it paves ways for improving value to the consumers and competition ensures the provision of quality product and services with the capacity to meet the needs and preferences of the consumer. Over the years the policymakers have tried to find better ways to improve the American health care system and minimize the expense that comes with health care market expansion and competition (Cicea, et al, 2010). In this study United States, current health market will be discussed, evaluating how competition in the market has resulted in both positive and negative impacts.

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Healthcare in the United States

The tremendous growth in size and of the healthcare system in the United States over the past few decades has seen stakeholders, who are the providers, suppliers, and consumers, pursue strategies that aim at enhancing performance in the health sector which is improving the value of services. The United States health care has not only grown but has registered structural shift too. While the healthcare has continually become concentrated, a wide variation in the concentration is also identified. More healthcare providers are, therefore, increasingly entering the markets, while more invest, others merge, innovate and exist. All these health care changes tend to influence the health care structure which encompasses quality of services, quantity, and price creating a competitive healthcare market Cicea, et al, 2010). Presence of Competition in the healthcare market resulted in the introduction of an imperfectly competitive monopolistic and oligopolistic market (Kernick, 2000). An imperfect demand is brought about by various factors that include, entry barriers such as large capital, expensive training of medical staffs, professional licensing and non-homogenous services.

Healthcare market competition and outcomes

In the early 90s, the healthcare sector had a dominantly specific medical specialty that includes, psychiatrists, women, tuberculosis, and children centred hospital. However, in the 21centuy, more and improved health specialty continue to be born and rise. In-patient and outpatient facilities, public and private hospitals continue to increase addressing and solving a wide range of medical problems as more specialized medical professional continue to flood in the market. Increased specialization has resulted in increased healthcare market entry creating a competitive edge between public and private hospitals (Chakravarty, 2008). Since the introduction of the specific hospital, a pattern has been identified whereby, specialty hospital attract healthier lifestyle persons than the general hospitals (Rivers & Glover, 2008). This is because specialized hospital ted to offer high tech special care than the regular hospital.

Due to market competition brought about by the changes in the healthcare sector, statistics show that more general hospitals have been forced to a merge with the intention of upgrading their services to compete with the specialty hospitals productively. The healthcare competition today has generated new medical care specialty in the outpatient hospitals that was traditionally fitted for inpatients hospital. According to Cullen, Hall & Golosinskiy (2009), today statistics show that in the United States more than 15million surgery are done in outpatient hospital annually, unlike before. This change can be attributed to the introduction of the ambulatory surgical center, which today compete amongst themselves and the outpatient acute care centers who provide similar services (Cullen, Hall & Golosinskiy, 2009).

Healthcare market competition has also resulted in the introduction of the first retail clinic, new health providers who are competing with specialty clinics in diagnosing and treating low acuity medical problems. In this retail clinic, no appointment is required, and well-trained nurses administer care with the help of a physician who operates remotely. The retail clinics are available next door and done past research has shown that the cost of has been proven less when compared to other healthcare providers and has no difference in the quality of care provided (Rivers & Glover, 2008). The low cost and adequate care have made the clinics more popular. Although healthcare market competition has proven decisive in improving the market structure and concentration competition has affected price and quality of care

An increase in health care providers improves the quality of health service delivery. Health providers try to outdo each other through offering quality services to their customers, services that meet the customers' needs perfectly. Increased number of healthcare providers and the high rate of innovation healthcare sector has caused providers aim for better and quality service provision. According to Castle, Engberg & Liu (2007), an increase in market concentration leads to improved quality of health service due to the need to outdo fellow competitors.

Presence of many healthcare providers in a healthcare market has led to reduced healthcare cost. Where by, hospitals try to compete through the provision of quality healthcare at low cost therefor attracting more patient to seek their services as compared to other healthcare providers. A study was done by (Rivers & Glover, 2008) show that there is the existence of a positive association between the prices charged on healthcare and quality of the health services offered. The presence of many health providers in the market has a significant effect on cost since many of the healthcare provider's prefer to operate at the low-profit-margin to attract health consumers.

Future policy and implications

Considering the competition among the health care providers, the policymakers should consider taking into account various things, which include.

Healthcare competitors require more policy actions such as guiding market participants to ensure that the healthcare market functions properly. Careful, constant evaluation of the health outcomes is also carried out to ensure that the health providers do not engage in unethical conduct such as giving low-quality healthcare that does not meet standards (Kernick, 2000). Ensuring market transparency through providing information on health care price and quality is also vital if the competition aims to improve health system performance.

In the healthcare sector pricing of services is paramount. However, the presence of healthcare market competition has resulted in the presence of unregulated health care prices. Some health specialties are too expensive and unaffordable to most low-income earners who highly require the specialized treatment. Such a case call for policymakers to revisit the policy on social equity in health (Chakravarty, 2008). Every people despite race, ethnicity, and class are entitled to good health care, and the price difference in health services is making it hard for some group of people to acquire total medical care. Future policymakers should come up with standard policies that regulate medical prices to give every person despite class, equal opportunities to access any medical service.


Castle, N. G., Engberg, J., & Liu, D. (2007). Have Nursing Home Compare quality measure scores changed over time in response to competition?. BMJ Quality & Safety, 16(3), 185-191.

Cicea, C., Dobrin, C., Popa, I., & Busu, C. (2010). Healthcare economics as method of rendering the activity effective. Management Research and Practice, 2(4), 421-432.

Kernick, D. P. (2000). The impact of health economics on healthcare delivery. Pharmacoeconomics, 18(4), 311-315.

Rivers, P. A., & Glover, S. H. (2008). Health care competition, strategic mission, and patient satisfaction: research model and propositions. Journal of health organization and management, 22(6), 627-641.

Cullen, K. A., Hall, M. J., & Golosinskiy, A. (2009). Ambulatory surgery in the United States, 2006.

Chakravarty, S. (2008). Much ado about nothing? Entry and operations of physician owned specialty hospitals.

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