COMPETITION AND REGULATION IN THE HEALTHCARE SECTOR
Overview of Secretariat Paper
OECD Competition Division
Federica Maiorano
Structure of background note
Introduction 2. Market characteristics and the introduction of competition
Features of health systems
Demand and supply
Competition in healthcare
Regulatory barriers to competition
Conclusions
Why advocate for procompetitive regulation?
• Procompetitive reforms in healthcare to make best use of scarce resources Competition contributes to efficiency
• No single model is optimal
• Changes in regulation can deliver tangible benefits Diversity of health systems
• Should be proportionate
• Should not restrict competition more than necessary Regulation not temporary but structural
Regulatory barriers
Licensing and entry requirements
Payment mechanisms
Professional licensing
Innovative services
Procompetitive regulation / demand
Licensing and entry requirements
Certificates of need
Min. numbers of procedures
Ownership regulation Different requirements
Screening suppliers (public health system) Regulatory uncertainty
• For complex procedures, learning by doing and investment in equipment
• But limited impact of volume on quality
• Alternative: clinical networks where each hospital remains autonomous
Payment mechanisms
Fee for service Case based, e.g. DRGs
Global budget Bundled payments
Hybrid Competitive neutrality
Recommendations by competition authorities, e.g.:
• Preferential rates to public hospitals
• Low rates → crosssubsidies of publicly funded patients by private patients
• Prioritise public providers in contracts for publicly funded SCS
Telemedicine and Electronic Health Records (HER)
Professional licensing Varying privacy rules
Reimbursement
Lack of interoperability
Regulatory uncertainty (digital tools)
Recommendations by competition authorities, e.g.:
• Harmonisation of privacy and data governance
• Requiring HER companies to provide access to systems
• Establish interoperability standards for HER systems
Access the OECD note and all documents from this roundtable at oe.cd/crhs