Irish Medical Organisation

The Market Model of Health Care - Caveat Emptor - Apr 2012

Faced with spiralling costs of healthcare, policy makers are increasingly looking to competition in health care markets in an effort to increase efficiency and quality of care and drive down costs. However health care markets are imperfect markets and the consequences of free competition in health care can conflict with policy goals. Because of market failure and because health is a major political issue most governments intervene in health care markets. In reality most countries rely on different mixtures of market mechanisms and regulation.

Health care markets can be considered in the context of private health insurers competing for enrolees and private providers (hospitals and physicians) competing for both patients and contracts with insurers.
The Government is proposing major reform of the Irish healthcare system, based on the Dutch model with managed competition between public and private health insurers and between public and private providers. This Position Paper will examine the impact of the market approach in healthcare and will examine some of the negative consequences of competition in both the private health insurance (PHI) market and the curative health care provider market which we believe policy makers should consider before embarking on major market reform. We look at the experiences of competition in the US, the largest health care market, the impact of managed competition in the Netherlands as well as our own experiences of healthcare markets in Ireland in order that we can learn from other systems and address the undesirable features in advance.

IMO Membership

Start reaping the benefits of membership.

If you were previously a member of the IMO you can rejoin here.

Join nowRejoin here ›


Have a question?
Please get in touch with us and we will be happy to answer.