The industrial organization of health care markets

Ben Handel, Kate Ho

Research output: Chapter in Book/Report/Conference proceedingChapter

Abstract

In this chapter we outline the tools that have been developed to model and analyze competition and regulation in health care markets, and describe particular papers that apply them to policy-relevant questions. We focus particularly on the I.O. models and empirical methods and analyses that researchers have formulated to address policy-relevant questions, although we also provide an overview of the institutional facts and findings that inform them. We divide the chapter into two broad sections: (i) papers considering competition and price-setting among insurers and providers and (ii) papers focused specifically on insurance and market design. The former set of papers is largely concerned with models of oligopolistic competition; it is often focused on the U.S. commercial insurance market where prices are market-determined rather than being set administratively. The latter focuses on insurance market design with an emphasis on issues raised by asymmetric information, leading to adverse selection and moral hazard. In addition, we discuss the literature on consumer choice frictions in this market and the significant implications of those frictions for I.O. questions.

Original languageEnglish (US)
Title of host publicationHandbook of Industrial Organization, Volume 5
EditorsKate Ho
PublisherElsevier B.V.
Pages521-614
Number of pages94
Edition1
ISBN (Print)9780323988872
DOIs
StatePublished - Jan 2021

Publication series

NameHandbook of Industrial Organization
Number1
Volume5
ISSN (Print)1573-448X

All Science Journal Classification (ASJC) codes

  • Industrial relations
  • Finance
  • Economics and Econometrics
  • Strategy and Management

Keywords

  • Firm behavior
  • Health care markets
  • Health insurance
  • Market structure and firm performance

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