The Industrial Organization of Health-Care Markets

2015/06/01 by Martin Gaynor, Kate Ho, Robert J. Town +1 · 343 citations
Business, Management and Accounting · Economics, Econometrics and Finance · #Business #Competition (biology) #Consumer Market Behavior and Pricing #Economic growth #Economics #Health care #Health insurance #Healthcare Policy and Management #Merger and Competition Analysis #Public economics #Quality (philosophy)

paper · doi:10.1257/jel.53.2.235

published in Journal of Economic Literature 53(2), 235-284 (American Economic Association)

openalex publication_date 2015/06/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/25

Abstract

The U.S. health-care sector is large and growing—health-care spending in 2011 amounted to 2.7 trillion and 18 percent of GDP. Approximately half of health-care output is allocated via markets. In this paper, we analyze the industrial organization literature on health-care markets, focusing on the impact of competition on price, quality, and treatment decisions for health-care providers and health insurers. We conclude with a discussion of research opportunities for industrial organization economists, including opportunities created by the U.S. Patient Protection and Affordable Care Act. (JEL J15, J24, J71, J81, K31)

Cited by

• Turf Wars: How Growth and Competitive Shocks Have Affected the Performance and Stability of Community Health Centers
• The Corporatization of Independent Hospitals
• Who Pays, Who Benefits? Producer-Insurer Games in Life-Saving Medicines
• Simulating Hospital Merger Simulations*
• The location of urban healthcare services: Evidence from Phoenix Yelp reviews
• Physician Practice Organization and Negotiated Prices: Evidence from State Law Changes
• The big cost of big medicine – calculating the rent in private healthcare
• The Association Between Provider Price and Complication Rates for Outpatient Surgical Services. [europepmc]
• Competition Among Mental Health Organizations: Environmental Drivers and Strategic Responses. [europepmc]
• Modelling competition in health care markets as a complex adaptive system: an agent-based framework. [europepmc]
• Competition between Public and Private Maternity Care Providers in France: Evidence on Market Segmentation. [europepmc]
• Pivoting to Childbirth at Home or in Freestanding Birth Centers in the US During COVID-19: Safety, Economics and Logistics. [europepmc]
• Estimating health care delivery system value for each US state and testing key associations. [europepmc]
• Advancing the Understanding of the Role of Responsible AI in the Continued Use of IoMT in Healthcare. [europepmc]
• Does healthcare system device volume correlate with price paid for spinal implants: a cross-sectional analysis of a national purchasing database. [europepmc]
• Associations of hospital volume and hospital competition with short-term, middle-term and long-term patient outcomes after breast cancer surgery: a retrospective population-based study. [europepmc]
• Do State Bans of Most-Favored-Nation Contract Clauses Restrain Price Growth? Evidence From Hospital Prices. [europepmc]
• The Influence of Practice Structure on Urologists' Treatment of Men With Low-Risk Prostate Cancer. [europepmc]
• Obamacare: A bibliometric perspective. [europepmc]
• "Shopping around" for treatment is not a solution to cancer backlog. [europepmc]
• Ways to Improve Hospital Quality - A Health System Perspective Comment on "Hospitals Bending the Cost Curve With Increased Quality: A Scoping Review Into Integrated Hospital Strategies". [europepmc]
• Pathways to reimagining commercial health insurance in India. [europepmc]
• Association between hospital competition and quality of prostate cancer care. [europepmc]
• Trends in Medicare Advantage participation among commercial insurers. [europepmc]
• Measuring Active Purchasing in Healthcare: Analysing Reallocations of Funds Between Providers to Evaluate Purchasing Systems Performance in the Netherlands. [europepmc]
• Does vertical integration increase the costs for primary care inpatients? Evidence from a national pilot programme in China. [europepmc]
• Relationship Between Insurance Status and Receipt of Cardiac Tests and Procedures During Hospitalization: A Cross-Sectional Study. [europepmc]
• Hospital system market share and commercial prices: a cross-sectional approach using price transparency data. [europepmc]
• Evolution and interaction mechanisms of China's high-performing national healthcare system. [europepmc]
• Insurer Size and Negotiated Hospital Prices: Insights From the Affordable Care Act in Arkansas. [europepmc]
• Hospital Mergers, Hospital Choice, and Care Quality for Pregnant Enrollees in Medicaid. [europepmc]
• The association between local hospital segregation and hospital quality for medicare enrollees. [europepmc]

Related

• Can Public Healthcare Afford Marketization? Market Principles, Mechanisms, and Effects in Five Health Systems
• The big cost of big medicine – calculating the rent in private healthcare
• Models for Organizing Health Services and Implications of Legislative Proposals
• Competition, Payers, and Hospital Quality1
• Can Health Insurance Competition Work? Evidence from Medicare Advantage