In the vast spectrum of healthcare Industry, there are individual markets for primary care service, hospital care, medical devices, pharmaceuticals, human resource as well as medical and nursing education. Therefore, the healthcare industry is one of the most important industries. The competition in the healthcare market is highly profitable to consumers as it helps in the reduction of cost, improvement in quality, and further encourages innovation. The competition also benefits customers as it provides incentives for constant product advancements and encourages a higher level of service performance. To create a competitive environment, the customer must have multiple procuring options and choices with reasonable pricing. Similarly, competition, regulation, and financial incentives can be significant ways to improve quality in healthcare. This also improves clinical outcomes and assists the system to function more efficiently.
The competitive market is all about exchange relations between buyers and sellers. It is also the perfect market that tends to offer the best possible outcome for both buyers and sellers. Some are promoters of the competition while some are not; promoters believe that competition leads to lower prices, premiums, and resources use with a higher quality of cure than the non-competitive markets. From the buyer’s and seller’s point of view, the competition brings both good and bad news.
Competition in various components of the healthcare industry
The healthcare industry mainly includes providers, buyers, employers, and patients. Further, there are few components that are core to the industry and the first important component contains individuals who provide health care. In the medical market, there is a huge competition between physicians as well as non-physicians such as psychologists to draw patients towards their respective practices.
The second important component is comprised of organizations that offer health care services like hospitals or hospital systems. Hospitals tend to compete for third-party payers, physicians, and patients. Hospitals use various tactics to retain the physicians such as providing highly trained staff and better equipment. To get more customers, hospitals offer advanced services at reduced prices.
The third component includes organizations that provide healthcare financing and insurance along with healthcare plans. Competition in financing and delivering plays a crucial role in the healthcare industry.
Competition in Financing
The role of financing in healthcare competition is very vital. Numerous healthcare systems have insurance coverage through national, local, or common insurers while some systems go with multiple and competing insurers. There are cases in which the level of actual competition is moderated by government regulations of a country and on the other hand, even though there are multiple insurers in operations, one cannot have the privilege to get it by personal choice but is offered considering other factors such as professional status.
Further, some countries let insurers compete for the business of citizens while few provide more than 5 options to the citizens from which they can choose. But in low and middle-income countries, the financial side is more around financial security. The competing insures may bring down premiums which may reduce price and improve quality.
Competition in delivering
The delivery of healthcare services provides a big ground for the competition. The competition in delivering promises certain benefits mostly in terms of cost and quality as providers compete for contracts from purchasers. Moreover, the privately-owned providers may get public finances and operate in competition with publically owned providers. Here, the competitors give greater roles to the consumers by offering them fix prices on non-priced aspects for care. The consumers, in this case, have a choice over which provider they would opt, for the same type of care. In addition, health systems can provide customers with choices to choose from even if the provider is not competing.
Going ahead, the competition can be divided into the following types of market competitions:
1. Competition in the physician dominant market
This is considered a non-price competition which is for the improvement of quality. Here, physicians dominate the distribution of hospital resources and treatment-related things along with the choice of hospital. In this case, the hospital basically competes for patients through efforts to attract physician but the competition of hospital services is greatly dependant on its location, quality as witnessed by physicians, and facilities.
2. Competition in the insurer dominant market
In this sector, hospitals have to compete for the inclusion of insurers’ provider networks and also try to control costs effectually since both have a more crucial role to play in this market. Ultimately, the most important factor in acquiring contracts and retaining patient base is the price.
According to some reports, the competition in the healthcare sector could not improve efficiency as many times the public and private insurance companies pay as much as three-quarters of the bills. Moreover, there are certain blockades in the competition such as limited reimbursement based incentives as the providers are not sufficiently compensated for delivering values. Even if the providers have improved value, they are not properly rewarded with increased market share giving inadequate market share incentives. One more reason for failure in the competition is that the participants are intended to divide value instead of creating value thereby making the competition zero-sum-based.
The use of new technologies and innovations in the healthcare industry is proving to be a great base to increase competition in the field. Few are mentioned below.
1. Payer-Provider Analytics/data software:
It helps the organizations to claim data, analytics, and decision-making tools based on quantitative data.
2. Competitor analysis:
Competitor analysis allows the physician to use the referral data and find which competitor receives the most referrals. Moreover, it also helps to learn about the organizations which might make the best partners based on referral volume.
3. Artificial Intelligence:
Disruptive technologies such as AI can help the patients to schedule doctor appointments analyzing severity symptoms, monitor health status, etc. Further, as per the situation, it could notify a human nurse and keep the homecare assistants fully informed about the progress of the patient. There are few innovations in which smart bots help in healthcare services, the bots are provided with chat messaging service.
4. Blockchain in healthcare:
Here, a record system is created using Blockchain which is independent of EMR’s controlling data and today, various electronic medical record systems are used, each having its own language for representing and sharing data.
Primary care should be in focus
There are supporters and opponents of the competition in the healthcare industry. On one hand, competition improves the efficiency and productivity of the solutions, while on the other hand, it increases excessive pressure and turns things around in not so good ways. Therefore, in order to create a better healthcare industry, the presence of healthy competition is a must with a sole focus on patients and their primary care.
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