Market structure of a healthcare organization
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Market structure of a healthcare organization
In economics, market structure refers to how various sectors are classed and
distinguished depending on the degree and form of products and service competition. There
are four different market structures absolute competition, autocratic competition, oligopoly,
and monopoly. My organization, a healthcare provider in the United States, belongs to the
healthcare sector and operates in the monopolistic competition market environment.
Health provider competition is often seen as improving efficiency and lowering costs
in the healthcare system. Uncertainty regarding the quality of medical and associated services
encourages product differentiation, more so when consumers are not responsible for the
entire cost of care. In the healthcare provider industry, contemporary technology is used to
measure superiority even when its clinical significance is unproven. This perfectly displays
the monopolistic competition market environment.
In a monopolistic competition market structure, it is considered that a company's
product or service is not a perfect match for what others in the same sector produce. A
product may vary from the other inexistent or perceived differences in quality. The single
production of a differentiated product or service makes up the 'monopoly' part, and the fact
that people can enter and exit freely in the market constitutes the 'competitive part' (Sivey, &
Chen, 2019). The monopolistic competition market structure is displayed in industries where
competition seems to focus more on heralding quality than offering a low price. Thus, this
market structure is more vivid in the healthcare sector and my organization.
Challenges and opportunities would arise from higher and lower degrees of government
intervention in the healthcare sector
The healthcare industry is an industry that is constantly under scrutiny by the
government. Thus, different opportunities and challenges may arise depending on the level of
government interventions. For instance, as healthcare providers are solely dependent on new
technology to enhance care provision, those who might apply the wrong technologies may be
considered fraudulent and face litigation. Further, strict laws and regulations may be imposed
in the use of new and untested technology, which may end up inhibiting the adoption of new
technology and, if implemented, subsequently lead to higher medical costs to cushion
healthcare providers from government litigations that may arise.
References
Sivey, P., & Chen, Y. (2019). Competition and Quality in Healthcare. In Oxford Research
Encyclopedia of Economics and Finance.
