Health Care Market, Research Paper Example

The current health care market is very competitive. Consumers have many choices of physicians, health care facilities, specialists, insurance providers, and treatment options. Also, consumers of today are also very informed and they are more proactive in their own care. They take a role in making decisions about the care they receive for their families and they often compare their choices (Hibbard, 2004). This reflects on the market because consumers have the power to choose the best care at the most cost-effective prices, so this drives competition in the market. So, price does reflect quality in the healthcare market because health care providers need to remain competitive. Health care providers have a vested interest in being the most cost-effective and quality-driven option for consumers.

Regarding quality of care being related to costs, health care providers and insurers often give incentives to consumers to use their services. They take advantage of consumer preferences and try to meet the needs they have according to want they want (DOJ, 2004). This is a trade-off sometimes of profits and quality, in the short-term. However, in the long-term providers come out more profitable by retaining more customers, getting repeat business and getting referrals.

Also, a trade-off occurs if cost, access, or quality is not balanced. For example, if costs are high then it may impede access for many consumers. The consumer market forces providers to tie in improved quality with lower costs, because the consumers are the ones who make the choices. Providers have a great deal of competitive pressure to perform well and lower costs. This is directly tied to the force of consumer buying power. Health care markets are constantly fluctuating as they try to keep up with the competition always apparent in the marketplace (DOJ, 2004).

References

DOJ. (2004). Improving Health Care: A Does of Competition. Federal Trade Commission and the Department of Justice. Retrieved from http://www.ftc.gov/reports/healthcare/040723healthcarerpt.pdf

Hibbard, J. H. (2004, June). New Roles for Patients and Consumers in Assuring High Quality Care. Virtual Mentor, 6(6).