Market structure and competition in the healthcare industry

Abstract

The present paper provides first empirical evidence on the relationship between market size and the number of firms in the healthcare industry for a transition economy. We estimate market-size thresholds required to support different numbers of suppliers (firms) for three occupations in the healthcare industry in a large number of distinct geographic markets in Slovakia, taking into account the spatial interaction between local markets. The empirical analysis is carried out for three time periods (1995, 2001 and 2010) which characterise different stages of the transition process. Our results suggest that the relationship between market size and the number of firms differs both across industries and across periods. In particular, we find that pharmacies, as the only completely liberalised market in our dataset, experience the largest change in competitive behaviour during the transition process. Furthermore, we find evidence for correlation in entry decisions across administrative borders, suggesting that future market analysis should aim to capture these regional effects.

The Role of The Marketing Mix Factors in Hospital Selection

“…This change in behavior led to a decrease in the number of outpatient visits and resulted in a decrease in hospital revenue (1,2). Another external factor taken into account by hospitals is the increasing number of hospitals in an area which automatically adds to the competition between hospitals in an effort to retain their customers (3,4).…”