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Market competition, ownership, payment systems and the performance of health care providers – a panel study among Finnish occupational health services providers

Published online by Cambridge University Press:  12 October 2012

Eila Kankaanpää ,
Ismo Linnosmaa  and
Hannu Valtonen
Eila Kankaanpää*
Affiliation:
Department of Health and Social Management, University of Eastern Finland, Kuopio, Finland
Ismo Linnosmaa
Affiliation:
Centre for Health and Social Economics, National Institute for Health and Welfare, Helsinki, Finland
Hannu Valtonen
Affiliation:
Department of Health and Social Management, University of Eastern Finland, Kuopio, Finland
*
*Correspondence to: Eila Kankaanpää, Department of Health and Social Management, University of Eastern Finland, POB 1627, FIN-70711 Kuopio, Finland. Email: [email protected]
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Abstract

Many health care reforms rely on competition although health care differs in many respects from the assumptions of perfect competition. Finnish occupational health services provide an opportunity to study empirically competition, ownership and payment systems and the performance of providers. In these markets employers (purchasers) choose the provider and prices are market determined. The price regulation of public providers was abolished in 1995. We had data on providers from 1992, 1995, 1997, 2000 and 2004. The unbalanced panel consisted of 1145 providers and 4059 observations. Our results show that in more competitive markets providers in general offered a higher share of medical care compared to preventive services. The association between unit prices and revenues and market environment varied according to the provider type. For-profit providers had lower prices and revenues in markets with numerous providers. The public providers in more competitive regions were more sensitive to react to the abolishment of their price regulation by raising their prices. Employer governed providers had weaker association between unit prices or revenues and competition. The market share of for-profit providers was negatively associated with productivity, which was the only sign of market spillovers we found in our study.

Type
Articles
Information
Health Economics, Policy and Law , Volume 8 , Issue 4 , October 2013 , pp. 477 - 510
Copyright
Copyright © Cambridge University Press 2012 

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