Free Essay Describing the Monopsony Market in Healthcare

The major responsibility of the government is providing quality healthcare markets is allowing for monopsony in the National Health Service. A monopsony is like a monopoly in the market, but the buyer becomes dominant and is in a position to negotiate for the prices (McLaughlin & McLaughlin, 2015). By allowing for monopsony in the market or the government becoming the monopsony, it is in a position of controlling and monitoring the prices of drugs and healthcare services. The government can allow one buyer to be a monopsony to bargain the costs and ensure that the healthcare market is not a free market to the health practitioners.

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Healthcare is an essential need that all citizens in a nation should access easily and at affordable prices. Therefore, the government should become a monopsony and be the sole buyer of drugs or authorize a single buyer in the market. The buyer then controls the prices of drugs in the healthcare market and supplies the drugs to the different medical service providers. The market should have no alternative buyers and laws set to restrict entry into the industry. Through the dominant buyer, the prices will go down, and all the citizens can access medical services and drugs at affordable prices (Henderson, 2014). This is the best strategy that a government can use to protect the citizens against exploitation by healthcare service providers.

A monopsony market ensures high quality in the production of goods and services. Since the market has a dominant buyer, the buyer controls the production of goods and services. This buyer dictates the specifications of production to the suppliers. The government can use this market structure to ensure that the quality of drugs manufactured is up to the required standard (McLaughlin & McLaughlin, 2015). The producers and suppliers will have to comply with the set specifications for their products to sell in the market. Through this technique, the healthcare service consumers are assured of the high quality of the drugs and some services they receive from the practitioners. Therefore, the government should restrict the healthcare market to be a monopsony market to ensure that the citizens receive the desired quality of medical products and drugs.

The government should ensure safe and fair competition between the suppliers to improve the efficiency of the monopsony. When a single buyer dominates the market, the effect is a reduction in the quantity of production in the market. Through a healthy competition among the suppliers and producers in the market, the government can control the quantity produced to stop it from falling below the required amount for the market (Clements, Coady, & Gupta, 2012). Waives can be introduced in the market to encourage new firms to enter into the supply and production. This procedure ensures a successful monopsony market to enable the government to control the healthcare market efficiently.

A monopsony is, therefore, the best way to control and manage the healthcare market. This kind of market protects the consumers of healthcare services from exploitation by selfish service providers. The market also controls the final price of products and drugs by enabling a single buyer to dominate and bargain for the prices of the goods and services. The quality of production in such a market structure is high (McLaughlin & McLaughlin, 2015). The high quality is because the manufacturers and suppliers produce and supply the products on the buyer's specification. Through this structure, the government can run healthcare services efficiently and ensure affordable healthcare products and services for the citizens.

References

Clements, B. J., Coady, D., & Gupta, S. (2012). The economics of public health care reform in advanced and emerging economies. Washington: International Monetary Fund.

Henderson, J. W. (2014). Health economics and policy. Australia: Cengage Learning.

McLaughlin, C. P., & McLaughlin, C. D. (2015). Health Policy Analysis: An Interdisciplinary Approach (2nd Ed.). Burlington, MA: Jones & Bartlett Learning.