Countervailing Market Power and Hospital Competition

2021 ◽  
pp. 1-33
Author(s):  
Eric Barrette ◽  
Gautam Gowrisankaran ◽  
Robert Town
Keyword(s):  
Willingness To Pay ◽  
Market Power ◽  
Claims Data ◽  
Antitrust Policy ◽  
Healthcare Sector ◽  
Hospital Competition ◽  
Hospital Market ◽  
Economic Theories ◽  
Hospital Merger

While economic theories indicate that market power by downstream firms can potentially counteract market power upstream, antitrust policy is opaque about whether to incorporate countervailing market power in merger analyses. We use detailed national claims data from the healthcare sector to evaluate whether countervailing insurer power does indeed limit hospitals' exercise of market power. We estimate willingness-to-pay models to evaluate hospital market power across analysis areas. We find that countervailing market power is important: a typical hospital merger would raise hospital prices 4.3% at the 25th percentile of insurer concentration but only 0.97% at the 75th percentile of insurer concentration.

scholarly journals Market concentration trends in South Africa’s private healthcare sector

2016 ◽  
Vol 19 (1) ◽  
pp. 53-63 ◽  
Author(s):  
Marine Erasmus ◽  
Nicola Theron
Keyword(s):  
Market Structure ◽  
Private Hospital ◽  
Market Concentration ◽  
Competitive Dynamics ◽  
Healthcare Sector ◽  
Private Hospitals ◽  
Hospital Market ◽  
Private Healthcare ◽  
Structure Changes ◽  
Relative Bargaining Power

The Competition Commission (CC) commenced with an enquiry into South Africa’s private healthcare sector at the beginning of 2014, the outcome of which could have far-reaching consequences for the medical industry in South Africa. The panel appointed to consider competition in the private healthcare sector has indicated that they are interested in understanding increased consolidation in the private hospital market and the effect this may have on competitive dynamics. This article considers historical concentration trends in the private hospital market from 2000 to 2012. In addition it also deals with changes in market structure in the medical scheme and administrator markets. These trends provide a complete picture of market structure changes and the implications for relative bargaining power of the various parties. It finds that whereas the market concentration of private hospitals has remained relatively stable since 2004, the market concentration of medical schemes and administrators has increased over this period.

The Interplay Between Obfuscation and Prominence in Price Comparison Platforms

2020 ◽  
Vol 66 (10) ◽  
pp. 4843-4862 ◽  
Author(s):  
Samir Mamadehussene
Keyword(s):  
Willingness To Pay ◽  
Market Power ◽  
Price Comparison

This paper analyzes price comparison platforms’ equilibrium design of their search environments, namely the order under which firms are displayed (having a prominent firm or listing firms randomly) and how much price complexity firms are able to use. It is found that (1) the possibility to obfuscate amplifies firms’ willingness to pay for the prominent position; (2) when platforms sell prominence, they optimally allow for more obfuscation than they would if they were to display firms randomly; and (3) if platforms are sufficiently differentiated, they find it optimal to sell prominence. Thus, platforms exploit their market power over consumers by implementing a prominent position and allowing for large levels of obfuscation. This paper also finds that in equilibrium, there is tension between platforms and firms regarding how much price complexity is used: firms would like to use even more obfuscation than what the platform allows, so the platform must monitor firms’ prices to make sure that they are not excessively complex. This paper was accepted by Juanjuan Zhang, marketing.

scholarly journals Daily Almond Consumption in Cardiovascular Disease Prevention via LDL-C Change in the U.S. Population: a Cost-Effectiveness Analysis

2019 ◽  
Author(s):  
Jifan Wang(New Corresponding Author) ◽  
Michelle A. Lee Bravatti ◽  
Elizabeth J. Johnson ◽  
Gowri Raman(Former Corresponding Author)
Keyword(s):  
Cardiovascular Disease ◽  
Cost Effectiveness ◽  
Willingness To Pay ◽  
Cost Effective ◽  
Dietary Factors ◽  
Sensitivity Analyses ◽  
Healthcare Sector ◽  
Cvd Prevention ◽  
The Cost ◽  
The U.S

Abstract Objectives Heart disease is the leading cause of death in the United States. The U.S. Food and Drug Administration approved the health claim that 1.5 ounces (42.5 grams) of nut intake may reduce the risk of cardiovascular disease (CVD). Previous studies have focused on the cost-effectiveness of other foods or dietary factors on primary CVD prevention, yet not in almond consumption. This study aimed to examine the cost-effectiveness of almond consumption in CVD primary prevention. Perspective & Setting This study assessed the cost-effectiveness of consuming 42.5 grams of almond from the U.S. healthcare sector perspective. Methods A decision model was developed for 42.5 grams of almond per day versus no almond consumption and CVD in the U.S. population. Parameters in the model were derived from the literature, which included the probabilities of increasing LDL-C, developing acute myocardial infarction (MI) and stroke, treating MI, dying from the disease and surgery, as well as the costs of the disease and procedures in the U.S. population, and the quality-adjusted life years (QALY). The cost of almonds was based on the current price in the U.S. market. Sensitivity analyses were conducted for different levels of willingness-to-pay, the probabilistic sensitivity analysis, ten-year risk prevention, different costs of procedures and almond prices, and patients with or without CVD. Results The almond strategy had $363 lower cost and 0.02 higher QALY gain compared to the non-almond strategy in the base-case model. The annual net monetary benefit (NMB) of almond consumption was $1,421 higher per person than no almond consumption, when the willingness to pay threshold was set at $50,000 for annual health care expenditure. Almond was more cost-effective than non-almond in CVD prevention in all the sensitivity analyses. Conclusion Consuming 42.5 grams of almonds per day is a cost-effective approach to prevent CVD in the short term and potentially in the long term.

Deregulating antitrust policy

2020 ◽  
Vol 44 (4) ◽  
pp. 871-890 ◽  
Author(s):  
Mark Stelzner ◽  
Mayuri Chaturvedi
Keyword(s):  
Income Inequality ◽  
Mergers And Acquisitions ◽  
Market Power ◽  
Market Concentration ◽  
Antitrust Policy ◽  
Horizontal Merger ◽  
Department Of Justice ◽  
Economic Variables ◽  
Merger Guidelines ◽  
Half Century

Abstract Starting in the 1980s, market concentration began to rise dramatically decreasing competition and increasing market power for the firms that remain. Such developments have important effects on a number of economic variables such as the efficiency of our economy and income inequality. Thus, it is important to ask: how has the administration of antitrust policy changed over the last half century? To shed more light on these important questions, we explore both change in policy outline by the Department of Justice in its Horizontal Merger Guidelines and change in administrative actions looking at both secondary requests for mergers and acquisitions of different sizes, and pre, post and change in Herfindahl–Hirschman Index in mergers and acquisitions contested by the Department of Justice through the courts.

scholarly journals Toll Competition Among Congested Roads

2004 ◽  
Vol 4 (1) ◽  
Author(s):  
Eduardo M Engel ◽  
Ronald Fischer ◽  
Alexander Galetovic
Keyword(s):  
Willingness To Pay ◽  
Market Power ◽  
Optimal Level ◽  
Market Size ◽  
Private Firms

Abstract Roads are being franchised to private firms in many countries, raising the issue of regulating the tolls they charge. When there is more than one road to get from one point to another, regulation need not be necessary, since competition may substitute for toll regulation. This paper studies toll competition among private asymmetric roads subject to congestion. We obtain two main results. First, in equilibrium tolls are higher than optimal, that is, there is too little congestion. This happens because road owners internalize the reduction in drivers’ willingness to pay due to congestion, thereby softening competition. It follows that the drawback of private competition is exercise of market power, not excessive congestion as is sometimes conjectured. Second, the distortion becomes smaller as market size and the number of roads grow, even if the density of drivers does not change. In the limit tolls converge to the socially optimal level and are just enough to make each driver internalize the congestion externality. This suggests that the scope for competition is better in larger networks.

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