Absence Of Price Competition Research Articles

Integrated health care delivery in Oncology using ‘Comprehensive Cancer Networks’

Introduction: In late 2013, 9 stakeholders, including the Dutch Federation of University Hospitals (NFU), the Dutch Hospital Federation (NVZ), and Top Clinical Hospitals (STZ), announced their plan to optimize delivery of oncology care in the Netherlands. In order to do so, cooperation among hospitals and between hospitals and primary care practices, in so-called ‘Comprehensive Cancer Networks’ (CCN), is to be intensified. The goal is to offer patient centered, high quality, efficient care, under increasingly cost-sensitive (e.g. competitive) circumstances. These networks should be fully functional by the end of 2015 and the NFU is said to invest an annual 2 million euro’s in their realization. In a practical sense, the CCN’s are advised to organize their care delivery based on existing regional situations. Health care providers are to agree on division of labor, standardization, diagnostics, follow-up, and referrals. However, these existing regional situations, especially in terms of division of labor among organizations and referral patterns, are unclear. Therefore, we seek to contribute to the question how oncology care is currently, informally, organized, by exploring organizational relations through patient referral networks in the Netherlands. Methods: We use over 1.3 million medical claims to build patient referral networks among secondary care providers of roughly 385 thousand oncology patients between 2008 and 2011 in the Netherlands. Using Social Network Analysis techniques, we built networks of referrals within 3, 15th International Conference on Integrated Care, Edinburgh, UK, March 25-27, 2015 1 International Journal of Integrated Care – Volume 15, 27 May – URN:NBN:NL:UI:10-1-117092– http://www.ijic.org/ 6, and 9 months after initial diagnosis. We focus on four different tumor types, namely breast tumors, prostate tumors, colon tumors, and gynecological tumors. We characterize these patient referral networks based on network level characteristics such as the existence or absence of price competition and the types of organizations active in the network, and ode level (i.e. organizational level) measures such as centrality, density, reciprocity, and the number of cliques. Next, we statistically compare these characteristics across and within each tumor type to explore differences, and the development of referral networks over time. Results and Conclusions: We find that structures of the referral networks for oncology care differ between tumor types. Although academic medical centers play a central role across all tumor types, the role of top-clinical hospitals, general hospitals, and independent treatment centers differs depending on the tumor type. For most tumor types referrals predominantly flow towards university hospitals, for others, most notably prostate tumors, referrals are more equally distributed between different organization types. It is noteworthy that referrals can occur up to 9 months after the initial diagnosis and that most referrals are unreciprocated. That is, when a patient is referred to another medical center, they are seldom referred back to the original hospital (for example for post-surgical care). Especially the lack of such reciprocated ties shows potential for improvement through constructing CCN’s. We conclude that the existing care situation does not always match the CCN goals and we therefore advise that these networks should be critically assessed during the formalization of network structures.

Impact of European Pharmaceutical Price Regulation on Generic Price Competition

Although economic theory indicates that it should not be necessary to intervene in the generic drug market through price regulation, most EU countries intervene in this market, both by regulating the maximum sale price of generics (price cap) and by setting the maximum reimbursement rate, especially by means of reference pricing systems. We analyse current knowledge of the impact of direct price-cap regulation of generic drugs and the implementation of systems regulating the reimbursement rate, particularly through reference pricing and similar tools, on dynamic price competition between generic competitors in Europe. A literature search was carried out in the EconLit and PubMed databases, and on Google Scholar. The search included papers published in English or Spanish between January 2000 and July 2009. Inclusion criteria included that studies had to present empirical results of a quantitative nature for EU countries of the impact of price capping and/or regulation of the reimbursement rate (reference pricing or similar systems) on price dynamics, corresponding to pharmacy sales, in the generic drug market. The available evidence indicates that price-cap regulation leads to a levelling off of generic prices at a higher level than would occur in the absence of this regulation. Reference pricing systems cause an obvious and almost compulsory reduction in the consumer price of all pharmaceuticals subject to this system, to a varying degree in different countries and periods, the reduction being greater for originator-branded drugs than for generics. In several countries with a reference pricing system, it was observed that generics with a consumer price lower than the reference price do not undergo price reductions until the reference price is reduced, even when there are other lower-priced generics on the market (absence of price competition below the reference price). Beyond the price reduction forced by the price-cap and/or reference pricing regulation itself, the entry of new generic competitors is useful for lowering the real transaction price of purchases made by pharmacies (dynamic price competition at ex-factory level), although this effect is weaker or non-significant for official ex-factory prices and consumer prices in some countries. When maximum reimbursement systems such as reference pricing or similar types are applied, pharmacies are seen to receive large discounts on the price they pay for the pharmaceuticals, although these discounts are not transferred to the consumer price. The percentage discount offered to pharmacies in a country that uses a price-cap system combined with reference pricing is positively and significantly related to the number of generic competitors in the market for the pharmaceutical (dynamic price competition at ex-factory level).

The promises and constraints of consumer-directed healthcare

Consumer-directed healthcare promises to reduce costs and increase quality by expanding provider choice for prospective patients. High-deductible insurance, employer- or government-subsidized health savings accounts, transparent pricing, and accurate information on clinical performance help generate millions of patients shopping for healthcare. As in any other well-behaved market, when patients shop, there is a link between financial reward and value for the individual patient. Absence of price competition, agency problems, and high barriers to entry in local markets are market failures that currently break this link in U.S. healthcare. Consumer-directed health plans are already popular among many employers and have established a momentum that indirectly shapes discussion of reform by the Obama administration. Complexity of reporting clinical results, dependence of treatment success on at-home patient behavior, and scientific ignorance among consumers threaten delivery of results promised by theory. Successful implementation requires regulator attention to sophisticated data reporting that adjusts for clinical risk, avoidance of patient-focused marketing that leads to over-consumption, and adequate subsidy of health savings accounts. In the end, implementation shifts the locus of healthcare system control from cost-shifting negotiations between employers, providers, and payers to new-found purchasing power of prospective patients.

The equilibrium locations of three stores with different selections of differentiated products

The equilibrium locations of three stores may be completely centralized (in the absence of price competition) if different stores sell different varieties of a differentiated product or different combinations of varieties that are partially overlapping.

Product Location with Foresight

Traditional location literature concludes that firms will optimally differentiate in order to alleviate a tendency toward competitive pricing. However, it has recently been shown that firms will minimally differentiate if they (correctly) anticipate an absence of price competition. This paper examines the relationship between product location and the sustainability of cooperative pricing, in horizontally and vertically differentiated markets. Further, it describes equilibrium locations when firms are able to choose their locations jointly and when they must choose independently.

Is Nonprice Competition in Currency Inefficient?

Note: This is a description of the paper and not the abstract as it appeared in the print journal. Some economists believe that the competitive survival of non-interest-bearing currency--the absence of price competition from markets for stored-value cards, banknotes, and token coins--implies a waste of resources on nonprice competition. We argue to the contrary that market forces drive issuers toward an efficient mix of price and nonprice competition. Where economic costs (rather than legal restrictions) rule out the delivery of interest on currency, competition exclusively along non-price dimensions is consistent with efficiency. We graphically illustrate such a case.

Is Nonprice Competition in Currency Inefficient?

Some economists believe that the competitive survival of noninterest-bearing currency--the absence of price competition from markets for stored-value cards, banknotes, and token coins--implies a waste of resources on nonprice competition. The authors argue to the contrary that market forces drive issuers toward an efficient mix of price and nonprice competition. Where economic costs (rather than legal restrictions) rule out the delivery of interest on currency, competition exclusively along nonprice dimensions is consistent with efficiency. The authors graphically illustrate such a case.

Technology and the financial institutions industry: Evolution of electronic fund transfer systems*

This paper presents a discussion on the new environment for retail banking under the influence of changing regulatory structure, advances in technology, and shift in consumer demand for financial services. It is argued that the Electronic Fund Transfer Systems (EFTS) play a substantially different role than the past. In the previous period, the absence of price competition in the financial services industry, the early stage of technological development, and resistance of customers towards EFT systems, limited their usage only to a social strata which was younger, more educated and had an above average income. For this group, EFTS was a non-price, convenient device that Financial institutions offered them. EFTS plays an important role in the new environment. Its cost cutting possibilities will enable institutions to provide low priced services. Its telemation provides services at more convenient times and places to consumers. Its homogenization of financial services leads the participating firms in the industry towards a more comprehensive multi-purpose financial firm. The evolution of EFTS also has numerous security and human resource implications.

The Title Insurance Industry, Reverse Competition, and Controlled Business. A Different View

In a recent article in this Journal,' Roussel and Rosenberg provide a defense of the title insurance industry as it is currently structured and regulated. They see and as posing serious problems for an industry that, they claim, otherwise performs in a satisfactory manner. They decry recent efforts to introduce more competition into the industry and applaud efforts to dampen (such as Section 8 of the Real Estate Settlements Practices Act of 1974). Their article is consistent with other recent defenses of the industry.2 This article will provide a different view.3 I will argue that the absence of price competition in title insurance is the fundamental problem of the industry and that reverse competition and controlled business arrangements are symptoms of that problem, rather than being problems themselves. Indeed, reverse

The Concentration-Profitability Relationship: Is There a Critical Concentration Ratio?

A MAJOR concern of the body of economic analysis surrounding the theory of the firm is whether the pricing behavior of oligopolistic industries differs from that of competitive industries. Theory suggests that where small groups of sellers account for a substantial proportion of an industry's output, the recognition of mutual interdependence will result in the absence of price competition. Furthermore, the prices and profits are expected to be above the level that would obtain under competitive conditions. Empirical investigations of the relationship between seller concentration and profitability have produced results generally in accord with the theory. However, neither theory nor the empirical evidence provides a clear insight into the specific nature of the concentration-profitability association. The unanswered question is whether or not there is a 'threshold' level of concentration which separates groups of industries earning significantly different profit rates. The purpose of this study is to examine empirically whether a dichotomous functional form of the concentration-profitability association presents a better explanation of the underlying relationship than the continuous linear form: and, if it does, how concentration and profitability are related within the separated groups. The results suggest that there is a critical value for concentration and that there is no significant association between concentration and profit rates within high and low concentration groups.