Essay on Competition in the healthcare system

Today, the competition in the healthcare system increases steadily. The rising costs of healthcare costs and the growing diversity of healthcare plans increase the competition even more, while the development of the pharmaceutical industry makes the competition even stronger. At the same time, the growing competition in the healthcare system has not only positive but also negative effects. Nevertheless, the US healthcare system still keeps progressing, in spite of possible negative effects of the competition, because the competition comprises an integral part of the development of the contemporary healthcare system.

In actuality, there are different forms of competition in healthcare system. In this regard, it is worth mentioning the competition between hospitals, which affects consistently the performance of hospitals and services they offer to customers. At this point, it is possible to distinguish the trend to the provision of multiple services by hospitals. In such a way, hospitals tend to become polyclinics, where patients can receive the treatment and diagnosis of any health problem they have. On the other hand, such development of hospitals is costly and may need substantial efforts from the part of hospitals to raise funds to improve their competitive position in the market.

The competition between healthcare plans has grown particularly strong in recent years because of the healthcare reform and the emergence of new plans, including healthcare plans supported by the government (Sanger-Katz, 2011). In such a situation, the competition between different healthcare plans provides patients with the wide choice of a healthcare plan that matches their financial position and their healthcare needs the best. At the same time, the healthcare plans set standards in the industry because patients expect receiving a set of services that are available in average healthcare plans.

Furthermore, the competition between physicians also increases as the buying power of customers drops and healthcare costs rise. In such a situation, the demand on healthcare services decreases because patients cannot afford covering healthcare costs, whereas the number of physicians offering healthcare services remains high. Therefore, the drop of demand increases the competition between healthcare professionals because they want to attract a possibly larger number of patients to increase their earnings. In such a way, they need to attract patients and improve consistently their performance that naturally increases the competition for physicians work hard to offer better services to customers.

At the same time, the competition between drug companies tends to grow particularly strong. In the time of economic recession, drug companies need to preserve their customers and to maintain their position in the market. Drug companies need to invest considerable funds in the development and introduction of new drugs, whereas return on investments may decrease in the time of economic recession because customers cannot afford buying expensive drugs. In such a way, drug companies need to sell their drugs but the drop of the demand and rising healthcare costs make their drugs unaffordable for customers. As a result, drug companies increase the competition and often they have to minimize their profits to decrease prices and to attract customers to their products.

In addition, today, it is possible to trace the competition in health insurance market (Patient Protection and Affordable Care Act, 2011). Health insurance companies increase the competition as the number of uninsured Americans increases rapidly because they cannot afford healthcare insurance. In such a situation, insurance companies attempt to attract uninsured companies and to gain the support of the state, through healthcare plans supported by the government.

At the same time, the growing competition in the healthcare industry has both benefits and pitfalls of competition. The major benefit of the growing competition in the healthcare system is the improvement of the quality of healthcare services. To put it more precisely, physicians, hospitals, drug companies, insurance companies and healthcare plans offer customers better conditions and higher quality of services to take a competitive advantage over their rivals. On the other hand, the high competition put under a threat the survival of prospective companies and talented physicians in the industry. For instance, a small drug company, which has great developments, cannot compete with large multinational corporations and cannot afford investing huge funds to launch the mass production of an effective medicine. Similarly, a talented but inexperienced healthcare professional cannot always hold his or her position in the highly competitive environment. The alternative to competition as the primary drive of the US healthcare system is the introduction of healthcare standards by the state that is likely to lead to the bureaucratization of the healthcare system.

The competition has to be successful and the essence of successful competition is the fair competition in the open market economy. Competitors should focus on innovations and high quality of services. They may use the competition intelligence to trace the major trends in the development of healthcare system and to improve their competitive position.

Finally, completion has the great influence on healthcare services and the choices patients have. The quality of healthcare services increases, whereas patients have larger choices.