Market Concentration and Market Power in Health Planning

Market Concentration and Market Power in Health Planning

According to a majority of researchers, there is a tendency of the coverage of health insurance being on high concentration in the United States (Austin, 2010). In contracting a hospital for a health plan, the aspect of market concentration plays a significant role. The element of market concentration is used in determining various attributes such as market power and profitability, among other factors. For this reason for the high level of health insurance, when big insurers try to flex their influence in insurance selling, there will be a distortion of the prices. When prices become distorted, therefore, there is a likelihood that there will be an ineffective standard of health insurance cover. Market concentration, however, does not directly translate to the use of market power by health insurers to hike prices or compromise the quality of services. Within certain conditions in the market, it is typically assumed that competition will raise the quality of services offered while stabilizing prices. In the health care system, however, the market is different from that of perfect market competition (Łyszczarz, 2014). The reason why market power might not be capitalized can be a result of the structure of the organization and governance of firms. Thus, health firms will concentrate on other interests rather than taking advantage of their market power in the industry. There has been a range of discussions from analysts as to whether concentration in the market enables firms to achieve profitability through flexing their market power. The majority of economists are of the view that there is a relation in regards to market concentration, together with increased profit margins. When it comes to contracting with a hospital for a market plan, it appears market concentration and market power stand as key marketing attributes.

The Integrated Delivery System (IDS)

Concerning the United States health care system, there have been some radical changes in health care delivery and financial protocol (Enthoven, 2016). Unlike the method used before, which was regarded as a traditional one and open-ended, the integrated delivery system (IDS), is more specialized. The integrated delivery system hugely appreciates the need for teamwork in coordinating healthcare-related issues. In addition to the teamwork, IDS comprises medical groups that are specialized and take into account healthcare-related costs. IDS disregards the autonomous culture of physicians in the health care system and seeks to a considerable extent, incorporate the work culture of working together. Therefore, the invention of the IDS has countered the traditional system free-for-service (FFS) failures effectively for both the US government and physicians too. For this reason of IDS becoming efficient, health providers, together with insurers, are striving to formulate a system that will compete with the IDS.

The complexities of Law and Ethics

In regards to understanding the connection and relationship between law and ethics in the health market concentration and market powersystem is of immense importance. As a philosophy, ethics can be defined as a careful approach in trying to understand deeply as to whether specific actions are deemed wrong or right, bad and good, and the influence those actions have on human beings (Rich, 2010). Based on this definition of ethics, it is outright that ethics extends to the working environment. In particular, ethics is a sensitive issue when it comes to the health care system, as it involves the relationship between patients and medical practitioners. Since law and ethics go hand in hand in the medical field, two arguments have existed on the process of putting up legislation on health in any country. The majority of health sector players are of the notion that standards in the public health system can never be acquired forcefully. Instead, setting up the standards should involve the public in an educative way. Contrary to this idea of engaging the people, the other purpose is that of enforcement. Practically, no argument is classical, and for this reason, there is a need for the health care system players to decide which decision to take in particular situations.

Ethical Dilemma in the Health System

In the health care system, ethics is a more demanding standard than the law. As opposed to the law, ethics is a more complex aspect as it keeps on evolving with time. In our daily routine, whether in business or personal issues, we encounter some critical moments where we have to make a decision, among many other alternatives (Nadica Figar, 2016). Since an individual is presented with a scenario of choosing the best choice from other options, ideas can conflict in reaching for the best suiting decision. Since the conflict in views can arise in reaching for the best option, it is from the conflict that the issue of ethical dilemma comes into play. Ethical dilemmas are instances in which it is difficult to deem whether an action to an individual scenario is right or wrong. In this era of the twenty-first century, the issue of ethical dilemma has risen to become a topical issue in many careers. For instance, with the rapid technological advancement in the health system, there has been a need for the use of human beings as experimental tools. With the emergence of innovation, there has been the practical need to assess discoveries made through technology to the real world. Concerning health care at the primary level, ethical dilemmas are more vivid upon which both physicians and nurses need to be sensitized (Zubović, 2018). Provided with adequate information on ethical dilemmas in the health system, physicians are equipped with provisions guiding their profession.

A good example can be human beings or any other living creature for this purpose in health care is regarded as a perfect tool for the experiment. Experimental drugs can be introduced to a person in an attempt to assess the effectiveness of a drug. Despite the individual being under close monitoring process, chances of the drug added to the body harming the person permanently or even death are likely. When it comes to such a situation on whether to use the person and disregard humanity or forego the experiment, which could save lives, it creates a case of an ethical dilemma. An ethical dilemma, therefore, can be seen to be complicated in the health system as it involves another complex aspect, such as ethical dilemmas.