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Oligopolistic pricing and price discrimination in healthcare

As noted above, the main sources of market power in

administrative barriers serve health care, and entry into the industry is limited by the state. The absence of more powerful reasons for increasing the market power of individual firms, the low degree of concentration of production leads to the fact that the mechanisms of oligopolistic pricing do not work.

A similar oligopolistic market structure is formed among manufacturers of expensive, high-tech and material-intensive equipment requiring a large-scale manufacturing company (for example, manufacturers of computer tomographs). There are seven firms in this market - Elscint, General Electric, Philips, Picker / Marconi,

Shimadzu, Siemens, and Toshiba. Other manufacturers may exist, but their market share is negligible. Compare the pricing policies of these firms with those of finished drug manufacturers using the paracetamol example given earlier.

The data in table 12 show that as the market structure approaches oligopolistic, the spread in prices for homogeneous products decreases, that is, the laws of oligopolistic pricing come into force.
A wide range of prices is explained by the strong differentiation of the product (emitters are different in their technical characteristics).

Far more often in the industry are examples of price discrimination. For example, a general practitioner or a dentist can significantly reduce the price of a service for a low-income patient and set a maximum price for a obviously paying client.

Table 12 -

Comparative characteristic of price dispersion in healthcare sub-sectors



The policy of price discrimination in health care is conducted by the state. Preferential dispensing of medicines, preferential prosthetics for certain categories of citizens is nothing more than a manifestation of such a policy. In contrast to company policies, when the goal of discrimination is to preserve gross income and profit, the state sets different prices for the same products for different groups of buyers in order to protect the material interests of individual social groups.
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Oligopolistic pricing and price discrimination in healthcare

  1. Oligopolistic pricing, interconnection and coordination. Price discrimination
    Oligopolistic pricing, interconnection and coordination. Price
  2. Price discrimination
    Price discrimination is one way to expand the market in a monopoly. A monopolist who produces less products and sells them at a higher price than in the face of pure competition loses some of the potential buyers who are ready to purchase the goods if their price were lower than the monopoly. However, reducing the price in order to expand sales, the monopolist
  3. Oligopolistic pricing
    The behavior of firms in oligopolistic markets is competitive. In the struggle for profit and increasing its market share, price control, advertising, and the establishment of output are used. The small number of competitors in the conditions of oligopoly forces firms to reckon with each other's reaction to their decisions. The following are important to consider oligopolistic pricing.
  4. Health Pricing
    One of the aspects of the economic activity of medical institutions (organizations) of any form of ownership is the pricing of medical services. Price - a monetary expression of the value of a product (or service). Cost - the amount of labor invested in the provision of medical services of a given quality. A characteristic feature of a medical service is that its production process
  5. Oligopolistic relationship and coordination
    A characteristic feature of the oligopoly is a high degree of interdependence and coordination of actions, since the number of enterprises in the industry is so limited that each of them, when making decisions on prices and volume of production, is forced to take into account the reaction of competitors. With the coordinated behavior of the company, oligopolists take into account and agree on a market strategy and
  6. Ministry of Health and Social Development of the Russian Federation

    Department of Health Care and Resort Development

    Central Research Institute of Health Organization and Informatization. Resources and activities of healthcare institutions, 2009
    Key health indicators. Russian Federation. Network and personnel of medical organizations. Russian Federation. The distribution of medical organizations by subordination. Russian Federation. Medical staff. District physicians. District pediatricians. General practitioners. Doctors and paramedical ambulance personnel. Nursing staff.
  7. Health Effectiveness. Determining Health Effectiveness
    The concept of the effectiveness of medical care should not be identified with the general economic category of efficiency, with the corresponding indicators in the field of material production. In health care, even when applying the most skilled labor and using modern medical equipment, there can be a “zero” or even “negative” result. Performance indicators
  8. GIRLS - THEN? LABOR RIGHTS, DISCRIMINATION, LAWS and “POSITIVE ACTION”
    Economic independence, equal opportunities for men to work and earn money with men, to realize their professional interests and ambitions are the basis of gender equality in any country in the world. It is no coincidence that already in the mid-1990s in our country, talk stopped that Russian women, for the most part, aspire to become housewives, to abandon the Soviet model
  9. Types of prices for medical services, pricing methods
    For medical services, the following apply: 1) “Budget estimates” (or “budget standards”): financing of medical institutions on the basis of adopted regulatory documents. “Budget estimates” are used for settlements between institutions of one territory, between divisions of one institution. When using this type of price, the calculations depend on the available financial capabilities, the needs of the treatment
  10. Concept, structure, economic boundaries of healthcare. The place of healthcare in the national economy.
    Concept, structure, economic boundaries of healthcare. Place of healthcare in the folk
  11. Lecture. Health Effectiveness. Determining Health Effectiveness, 2011
    The lecture gives the concept of health care efficiency, considers various types of health care performance indicators and their calculation, much attention is paid to the cost-effectiveness of health care and its features in
  12. Lesson 12 Topic: DEVELOPMENT OF HYGIENE, SOCIAL HYGIENE AND HEALTH ORGANIZATION IN ALTAI KRAI. FORMATION OF DOMESTIC MEDICINE AND HEALTH IN THE SOVIET PERIOD. DEVELOPMENT OF THEORETICAL AND CLINICAL DISCIPLINES
    Goals and objectives: 1. To acquaint students with the development and establishment of healthcare in the Soviet period. 2. Find out the main directions of preventive medicine. 3. To acquaint students of the medical and preventive faculty with the creation of the republic’s sanitary authorities. 4. Acquaintance of students with the history of the development of hygiene in the region. The development of social hygiene in Altai
  13. Market power in healthcare
    Like any branch of the social sphere, public health is under a regulating state influence, which somewhat distorts the manifestation of market laws in the process of functioning of enterprises. The need for state regulation of market relations in healthcare is determined by the fact that the health of the nation is one of the main indicators of the level of socio-economic
  14. Non-price competition and product diversity in healthcare
    The manifestation of non-price competition and the desire of manufacturers to differentiate the product takes place in all, without exception, sub-sectors of healthcare. In the conditions of fierce competition, the medical industry enterprises apply the following methods of non-price competition:? providing volume discounts for the purchase of a large batch of equipment; ? deferred payment
  15. Features of placement and effective sizes of healthcare enterprises
    When analyzing the potential effectiveness of deploying a health care enterprise in any territory and assessing the effects of survival factors, a number of industry-specific features arise (Table 7): Table 7 — factors for the location of health care enterprises according to the survival criterion {foto14} * Mass consumption of medical services involves seeking medical help any
  16. People's Commissariat of Health
    The Soviet period of development was marked by fundamental changes in the political, social and economic structure of the country. The fundamental principles of building a state, its constituent elements were modified. The healthcare sector, as one of the directions for ensuring the national security of the country, did not remain aloof from these changes. Guided by new principles, deciding
  17. Healthcare structure
    Under the sectoral structure of health care is understood the separation of the health care industry into independent parts, characterized by the specifics of the types of activities or services provided by the sub-sector. Due to the significant diversity of activities and health services and the lack of a single attribute, according to which such services can be divided into groups of homogeneous
  18. HEALTH REFORM BASES
    Reform is the natural state of health care (WHO, Lublin Charter, 1967. Health principles: ethical values, better health, better quality, primary health care priority, justice, equity, humanism, better financing). Motivating reasons:? lack of funding? cost increase? difficulties of the national economy? system difficulties
  19. . SPECIAL HEALTH FORMS
    In accordance with the federal laws “On Defense” and “On Mobilization Training and Mobilization in the Russian Federation”, special forces are created in the country when mobilization is announced, designed to perform special tasks but to ensure the combat activity of the Armed Forces of the Russian Federation. To participate in the medical support of personnel of the Russian Armed Forces
  20. USSR Ministry of Health
    Since 1946, all government bodies, in connection with the transformation of the Council of People's Commissars into the Council of Ministers, were renamed the ministries of the USSR. At the same time, not only the name of the department has changed; certain changes have also occurred in the activities of government bodies in the field of public health. In particular, the new Ministry of Health of the Union
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