Health Care Competition - Book Report/Review Example

Health Care Competition Health Care Competition Competition among the businesses in all the industries is a mechanism that increases value for patients. Competition can ensure the provision of better products and services to satisfy needs of the customers. The purpose of paper is to develop a model that investigates different complex issues and relationships that associate with competition in the health care industry. The methodology of the study is to review 50 different items. Some of the perspectives include health system costs, nature of service quality, and patient satisfaction in healthcare. Different authors contend that competition affects several relational perspectives in the health care industry. The authors examine the relationships between competition and health care system costs; between competition and patient satisfaction; and between competition and health care system costs. The studies illustrate that competition has the capability of increasing the value of customers over time. Quality and process improvements lead to decreased costs that in turn results in an increase in customer satisfaction. The author provides direction to the advancement of knowledge based on different considerations. First, is the possibility of providing a consistent definition of healthcare competition in relation to patient satisfaction? Second, identifying a mechanism in competition in healthcare industry once the patients receive premium products. The author reviews impact of competition, system costs, and patient satisfaction in healthcare. The model uses a system approach that relates competition and patient satisfaction. Some of the drivers in healthcare industry include political dynamics, government regulations, change in social demographics, and change in technology. The drivers in healthcare industry result in disintegration of healthcare networks, cost pressures, and intensified competition. The author informs that traditional competition in health care entails elements such as convenience, superior products, quality, and price while, one can base competition on new technology and innovation. The main role of competition in healthcare is to provide a mechanism that can reduce health care costs. Competition has the capacity of eliminating inefficiencies that can yield high production costs, high health service, and delivery costs. In the 80’s United States sought to change health care by changing the market principles that allocate scarce resources. The author criticizes this ideology since competition could not enhance efficiency in health care industry since the insurance firms caters for most of the medical bills. Another author cites that American health care is a zero-sum situation since the system divides value other than creates value. In other cases, a type of competition will erode the existing value due to incurring unnecessary costs. Some of the features of zero-based competition in healthcare associate with application of improper incentives, incorrect level of competition, incorrect geographic market, and a focus on cost reduction. The author advocates for a positive-sum competition in healthcare with the following attributes: improved value, alternatives for specific conditions, suitable market, proper level of competition, correct information on the providers, and the treatment of specific diseases. The disadvantage of positive-sum based competition is that it does not have guaranteed success since it requires substantial reforms. Competition is a crucial activity in the health care industry that consists of employers, payers, patients, and providers. The first component comprises of individuals that provide health care that include practitioners and physicians. Physicians compete for the patients that have the ability of paying for their own services and do not require health insurance Physicians compete for affiliation to establish independent practice association to ensure their patient flow. Physicians also compete in the medical market to reduce competition from non-physicians such as podiatrists and psychologists. The second component compromises of organizations that provide health care services. Healthcare institutions compete for physicians, insurance firms, and patients at the same time. In the past, hospitals compete for physicians by providing them with efficient staff or better equipment. The current trends hospitals compete for patients by providing them with better amenities, reduced prices, and provision of more services. Locally and globally, there exists competition for medical talent and technology. In the world of health care, an organization must consider physician migration and physician shortages to recruit best and brightest health care providers. The process of recruiting physicians presents many challenges especially in the primary care specialties in the marginalized areas. A wise organization considers the age demographics of the staff to enable it plan on its recruitment needs. The third component comprises of organizations that provide health care financing, health care plans, and insurance. Those that purchase insurance plans must consider the varying prices to enable make informed decision during purchase. Some of the factors of competition in the insurance plans include quality, access, benefit, and premiums. Plans contain different degrees of freedom to provide choice, coverage, and benefit to make comparison on the complicated plans. The author proposes a model to analyze two types of health care market competitions so that we can understand better the nature of competition in health care. The two types consist of competition in physician-dominated markets and competition in insurer dominated markets. In a physician- dominated market, the physicians decide when to admit patients to influence the choice of hospital. Once a patient receives admission, the physicians dominate the distribution of hospital resources and the operations that relate to treatment. In a physician-dominated market, hospitals compete for patients in an effort to attract physicians. According to the author, hospital costs tend to increase quality competition market dominated by physicians. In an insurer-dominated market, hospitals and insurers adopt an aggressive role. For example, a hospital secures network contracts while competing for the inclusion of insurers to control the costs. A hospital can lose contracts if the managed care plan fails to secure enough patients. Price is a crucial factor to acquire managed care contract and retain a patient base. The insurance plan also competes for the quality of provider networks, quality assessment procedures, credential screening, and the cost to payers. Some of the measurement of health care competition includes the market areas, identification of products on offer, selecting a basic measure, forces that modify competitive dynamics, and accounting for managed care. The author observes of an increase in concomitant competition in reference to the increase of firms. One can measure competition by identifying the products and services and the relevant geographic market. The Herfindahl- Hirshman Index (HHI) is one of the widely used measures of competition. Different authors agree on the use of HHI to assess the likelihood of a merger that result in excessive power. Professionals struggle for many years to formulate a concise quality of health care. The author defines quality of health care as the production of improved health and the satisfaction of a population within the constraints of resources and consumer issues. From physicians’ perspective, quality of health entails technical and physician-patient interaction. The technical aspects of quality have two sub dimensions that include the appropriateness of services provided and appropriate care provided. The appropriateness of service provided requires the physicians to make high quality decisions concerning the care for the patients. Some of the factors of quality care include timeliness of execution, judgment, and proficiency. The quality of interaction between the physicians and patients depend on quality of communication, physician ability to treat patients, and the physician ability to maintain a patient’s trust. In conclusion, the health care industry faces many challenges such as increased competition on the quality of health care and the systems costs that are not specific. The author’s evidence concerning the relationship of quality of care provided to patients and the systems is not conclusive. The information concerning the drivers of customer satisfaction lacks clarity. Various authors contradict each other and this leads to ambiguity of the quality and patient satisfaction examined in isolation. It is crucial to examine the inter-related nature of the issues. The research model proposed by the author has propositions that examine the complex issues of competition in health care. The model proposed will have significant implications for the policy makers. References Asoh, D. A., & Rivers, P. A. (2007). A research model of health-care competition and customer satisfaction. Health Services Management Research, 20(4), 244-252. doi:10.1258/095148407782219003 Bloom, P. N. (1997). Studying Consumer Responses to the Changing Information Environment in Health Care: A Research Agenda. Advances In Consumer Research, 24(1), 360-365. Falkenreck, C., & Wagner, R. (2011). The impact of perceived innovativeness on maintaining a buyer-seller relationship in health care markets: A cross-cultural study. Journal Of Marketing Management, 27(3/4), 225-242. Read More