Market Concentration in Secondary Health Services Under a Purchaser-Provider Split: The New Zealand Experience

Abstract

The separation of purchaser and provider in government-funded health systems enables competition to develop between providers. Competition is seen as a means to drive technical efficiencies by providers. While it is difficult to assess comprehensively the level of competition in a market taking into account contestability and substitutability effects, it is possible to measure the degree of market concentration. This paper employs the Hirschman-Herfindahl index to provide measures of market concentration in selected secondary health care markets in New Zealand immediately prior to (1992) and following (1994) implementation of a purchaser-provider split. The results show that, generally, the selected markets are highly concentrated and that there has been little change in the degree of concentration over the 2 year period under investigation. The paper also discusses some of the methodological problems associated with the measurement of market concentration and acknowledges the limitations of such measures as indicators of competition.

Concentration and drug prices in the retail market for malaria treatment in rural Tanzania

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“…countries, such as the UK and New Zealand (Ashton and Press, 1997;Propper and Soderlund, 1998;Roberts, 1993), and a few studies of hospital markets in developing countries (Amin, 2002;Bennett, 1996;Ginson-Bautista, 1995;Muraleedharan, 1999;Nakamba et al, 2002). The non-hospital sector is far less studied, especially in low-income settings, although it is the main source of treatment for pervasive and potentially fatal diseases such as diarrhoea, tuberculosis, acute respiratory infection and malaria.…”

Performance Impacts of Information Technology: Is Actual Usage the Missing Link?

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