Competition in medical services and the quality of care: concepts and history.
This paper reviews the concept of optimal quality in medical care from an economic viewpoint. It also provides some data on recent trends in competition in the health care sector. Economically optimal quality reflects a tradeoff of marginal benefits against (minimized) marginal cost. Actual quality may be suboptimal either because of technical inefficiency in the production of quality or because consumers fail to make proper choices. In concept, competition, if supplemented by adequate information, can help. Overall competition in the hospital industry has declined modestly in recent years, but competition in markets for more generously reimbursed specific services, such as coronary artery bypass grafting, has increased.
Pauly
Mark V
MV
Department of Health Care Systems, The Wharton School, University of Pennsylvania, 208 Colonial Penn Center, 3641 Locust Walk, Philadelphia, PA 19104, USA. pauly@wharton.upenn.edu
D019985:Benchmarking; D001026:Coronary Artery Bypass / Q000191:economics; D004465:Economic Competition; D006801:Humans; D011787:Quality of Health Care; D011907:Rate Setting and Review; D014481:United States