European Health Care Systems and the Emerging Influence of European Union Competition Policy.

CONTEXT: Since the 1990s, the EU's influence over national health care policy has been limited to European internal market law or social policy coordination mechanisms. The introduction of EU competition law into health care is more recent and underdeveloped; however, its introduction would potentially be much more far-reaching and disruptive. METHODS: Three EU competition law (state-aid) cases are used and comprise both Court of Justice and European Commission decisions. One is from Ireland, one is from the Netherlands, and the third is from Belgium. FINDINGS: The Belgian (Iris-H) case sees EU institutions scrutinize a clearly "social" (nonmarket) health care model with EU competition law for the first time. This is a highly significant development. It is clear, however, that the European Commission is more reluctant to use EU competition law to scrutinize health care systems than the European courts are. CONCLUSIONS: This intent on the part of EU institutions will have to be assessed in future cases, as considerable uncertainty about its shape and outer contours remains. However, EU competition law, and the EU's state-aid investigation apparatus, encroaching into the national health care systems for the first time is highly significant.

Applicability of European Union Competition Law to Health Care Providers: The Dividing Line between Economic and Noneconomic Activities.

Ever-increasing health spending, which, according to future projections, continues to outpace economic growth, will further endanger the financial sustainability of health systems. In a quest to improve the efficacy and efficiency of the health system and thus strengthen its financial sustainability, member states are employing market-based mechanisms to finance, manage, and provide health care. However, the introduction of elements of competition is constrained by the application of EU competition law, which raises significant concerns regarding the applicability of competition law and its limits in the field of health care. Due to the lack of a clear definition in EU legislation, the applicability and scope of competition law are determined on a case-by-case basis, which reveals an inconsistent approach by the European Commission and the CJEU regarding the application of competition law to health care providers and has created legal uncertainty. The aim of this article is to analyze relevant decisions by the commission and the CJEU case law in the pursuit of "boundaries" that may trigger the applicability of competition law with regard to health care providers. Based on the findings of the analysis, the article proposes a set of principles or guidelines for determining whether a health care provider should be considered as an undertaking and, as such, subject to EU competition law.

Consolidation in the Electronic Health Record Market, 2009-2017.

BACKGROUND: To quantify changes to the electronic health record (EHR) market in Rhode Island and to assess the degree of EHR market consolidation between 2009 and 2017. METHODS: The EHR market in Rhode Island is represented by three measures: the proportion of physicians who have adopted an EHR, the number of EHR vendors in use, and EHR market competitiveness, captured by the Herfindahl-Hirschman Index (HHI). RESULTS: The EHR market became more consolidated overall between 2009 and 2017. Among outpatient physicians, the market has remained competitive, despite ongoing consolidation. In contrast, the EHR market among inpatient physicians crossed into the "highly concentrated" zone in 2015. DISCUSSION: While consolidation in the EHR market may facilitate the exchange of data across health systems, potentially reducing duplicative testing and facilitating timely diagnosis, limiting competition may affect vendors' responsiveness to calls for improved usability and innovation.

Analysis of the economic situation of the South East European pharmaceutical industry.

Background: The pharmaceutical industry in the countries of Southeast Europe is still underdeveloped. Despite experience and tradition as well as significant research efforts and innovation potential, there are still big differences among the companies in the pharmaceutical sector of the SEE countries. It is for this reason that the subject of the study is the analysis of the comparative advantage in exports of the pharmaceutical sector of the SEE countries.Aim: The aim is to point out the potential of the sector and the directions of its development. The study also aims to define the position of the pharmaceutical sector in the SEE countries in today's global context. The study has comprised the pharmaceutical products belonging to group 30 in the HS6 classification and SITC 54 classification in the period 2005-2018.Conclusions: The results of the study indicate that the SEE countries have negative comparative advantage in exports, in the analysed period, except for Slovenia, which stands out with positive values of the RCA index. The products, dominating the foreign trade of the SEE pharmaceutical sector, belong to the group of Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses.

Quantifying the competitiveness of the electronic health record market and its implications for interoperability.

OBJECTIVE: The objective of this study was to quantify both the competitiveness of the EHR vendor market in the United States of America (US) and the degree of fragmentation of individual Medicare beneficiaries' medical records across the differing EHR vendors found in the US healthcare system. METHODS AND MATERIALS: We determined the Part A and Part B Medicare-expenditure weighted market shares of EHR vendors and estimated the rate of attestation of meaningful use (MU) for EHRs among Medicare Part A & B providers from 2011 to 2016. Based on these data we calculated the annual Herfindahl-Hirschman Index to quantify the competitiveness of the EHR market as well as the number of vendors individual Medicare beneficiaries' medical records were stored in for the period 2014-2016. RESULTS: We find that as of 2016 the EHR vendor environment was competitive but trending towards becoming highly concentrated soon. We also found that patient medical records were highly fragmented as only 4.5 % of expenditure-weighted individual Medicare beneficiaries had their MU medical records associated with a single vendor, while 19.8 % of expenditure-weighted beneficiaries had their MU medical records stored in 8 or more vendors. DISCUSSION: These results indicate that there are tradeoffs between EHR market competition, and the challenges associated with achieving interoperability across numerous competing vendors. CONCLUSION: Uncertainty of interoperability among different EHR vendors may make transmission of medical records among different providers challenging, mitigating the benefit of vendor competition. This highlights the critical importance of current interoperability efforts moving forward.

Tying Medicare Part B Drug Prices to International Reference Pricing Will Devastate R&D.

According to Secretary Azar of Health and Human Services, implementing international reference pricing (IPI) in Medicare Part B will have minimal impacts. He has stated, "These savings, while substantial for American patients and taxpayers, cannot possibly pull out more than 1 percent of R&D." As companies traditionally spend 20% of free cash flow on R&D, we have measured the IPI impact according to industry standard metrics. The potential negative impacts of the international reference pricing plan, as it is currently structured, are numerous. Companies are likely to avoid developing Medicare Bart B physician-administered drugs in the future if it comes to fruition. Further, if distributing in any of the included countries in the benchmarking exercise that traditionally have prices far below that of the United States has the impact of creating lower US prices where the industry currently derives more than 80% of their global profit, companies will simply not seek market access in those benchmarked countries and patients in those countries will not receive the medicines they need. The idea that companies will be able to unilaterally raise prices in Europe defies logic and practice. Many countries in the EU have been threatening IP rights under the TRIPS clauses of the WTO for several years because of their belief that pharmaceutical pricing is unacceptably high right now, without the IPI. Harnessing real-world evidence would allow for increased competition by faster time to market. One wonders why an approach encompassing the improved time to market was not considered, as the reference pricing proposal as it stands now, ultimately, will reduce R&D budgets, impair the overall investment climate, and deprive patients the new medicines.

Does hospital competition improve efficiency? The effect of the patient choice reform in England.

We use the 2006 relaxation of constraints on patient choice of hospital in the English NHS to investigate the effect of hospital competition on dimensions of efficiency including indicators of resource management (admissions per bed, bed occupancy rate, proportion of day cases, and cancelled elective operations) and costs (reference cost index for overall and elective activity, cleaning services costs, laundry and linen costs). We employ a quasi differences-in-differences approach and estimate seemingly unrelated regressions and unconditional quantile regressions with data on hospital trusts from 2002/2003 to 2010/2011. Our findings suggest that increased competition had mixed effects on efficiency. An additional equivalent rival increased admissions per bed by 1.1%, admissions per doctor by 0.9% and the proportion of day cases by 0.38 percentage points, but it also increased the number of cancelled elective operations by 2.5%.

Rethinking Health Care to Spur Competition.

Changing scope-of-practice laws is one approach.

More Reform of the English National Health Service: From Competition Back to Planning?

The period of sustained financial austerity since 2009 has led to a shift in competition policy within the English National Health Service. Policymakers have directed their attention away from the preexisting priority to support quicker access to routine and planned hospital care and have focused instead on improving emergency, cancer, and general practitioner services. This has prompted the development of a new policy framework and, in particular, a desire to create collaborative health systems focused on specific populations. In addition, previous policy initiatives to engage the leadership of general practitioners in planning services have been revisited. The overall effect has been to shift emphasis away from competitive markets and back toward a planning approach.

Competition in Outpatient Procedure Markets.

BACKGROUND: More than half of all medical procedures performed in the United States occur in an outpatient setting, yet few studies have explored how competition among ambulatory surgery centers (ASCs) and hospitals affects prices for commercially insured outpatient services. OBJECTIVES: We examined the association between prices for commercially insured outpatient procedures and competition among ASCs and hospitals. RESEARCH DESIGN: Using claims from the Health Care Cost Institute for 2008-2012, we constructed county-level price indices for outpatient procedures in hospital outpatient departments and ASCs. Using regression analysis, we estimated the association between prices and ASC availability, outpatient and inpatient hospital competition, hospital/physician integration, and several other hospital market characteristics. Our estimates were identified from changes within counties over time. RESULTS: First, ASC availability was associated with decreases in overall outpatient procedure prices, mostly due to reductions in the prices paid to hospital outpatient departments. Second, competition among hospitals was also associated with decreases in outpatient procedure prices-and had an effect more than twice as large as the effect of ASC availability. Third, competition among ASCs was also associated with reductions in the prices paid to other ASCs. CONCLUSIONS: Our results suggest that competition from ASCs benefits consumers through lower prices for outpatient procedures. Any conclusions about the broader welfare implications of the rise in ASCs, however, must balance the price reductions that we found with the volume increases found in previous work, particularly the volume increases at physician-owned ASCs.

Paying more for less? Insurer competition and health plan generosity in the Medicare Advantage program.

This paper explores the relationship between insurer competition and health plan benefit generosity by examining the impact of a regulatory change that caused the cancellation of 40% of the private plans in Medicare. I isolate cancellation's causal effect by using variation induced by insurers canceling all plans nationally. Results show that insurers in markets affected by cancellation reduced the benefit generosity of the plans remaining in the market. In the average market, out-of-pocket costs for a representative beneficiary enrolled in plans not directly affected by the policy increased by $91 annually. In the least competitive markets, out-of-pocket costs increased by roughly $64-$127 a year for enrollees in those plans. Meanwhile in the most competitive markets, benefit generosity barely changed. These findings have crucial implications for markets such as health insurance exchanges, as they suggest that plan generosity is degraded when competition declines.

Limited distribution networks stifle competition in the generic and biosimilar drug industries.

A limited distribution network (LDN) restricts the distribution channel for a pharmaceutical drug to 1 or a very small number of distributors. This strategy may allow for more effective allocation of drugs in shortage and is purported to help ensure the safe distribution of high-risk drugs to small patient populations. However, in recent years, some drug companies, including Turing Pharmaceuticals, have used LDNs to prevent generic and biosimilar companies from accessing samples of drug products necessary to perform testing required by the FDA for generic and biosimilar drug applications. LDNs also hamper provider access to pharmaceuticals and facilitate price gouging. This paper synthesizes existing knowledge on the misuse of LDNs to thwart competition, clarifies the relationship between limited distribution and the FDA Risk Evaluation and Mitigation Strategies, discusses proposed federal legislation under consideration to address this issue, and offers several policy options to remedy this anticompetitive practice, including authorizing the FDA to require the sale of approved drug products to generic and biosimilar drug developers.

Market structure and competition in the healthcare industry : Results from a transition economy.

The present paper provides first empirical evidence on the relationship between market size and the number of firms in the healthcare industry for a transition economy. We estimate market-size thresholds required to support different numbers of suppliers (firms) for three occupations in the healthcare industry in a large number of distinct geographic markets in Slovakia, taking into account the spatial interaction between local markets. The empirical analysis is carried out for three time periods (1995, 2001 and 2010) which characterise different stages of the transition process. Our results suggest that the relationship between market size and the number of firms differs both across industries and across periods. In particular, we find that pharmacies, as the only completely liberalised market in our dataset, experience the largest change in competitive behaviour during the transition process. Furthermore, we find evidence for correlation in entry decisions across administrative borders, suggesting that future market analysis should aim to capture these regional effects.

Managing imperfect competition by pay for performance and reference pricing.

I study a managed health service market where differentiated providers compete for consumers by choosing multiple service qualities, and where copayments that consumers pay and payments that providers receive for services are set by a payer. The optimal regulation scheme is two-sided. On the demand side, it justifies and clarifies value-based reference pricing. On the supply side, it prescribes pay for performance when consumers misperceive service benefits or providers have intrinsic quality incentives. The optimal bonuses are expressed in terms of demand elasticities, service technology, and provider characteristics. However, pay for performance may not outperform prospective payment when consumers are rational and providers are profit maximizing, or when one of the service qualities is not contractible.

The Role of China in the UK Relative Imports from Three Selected Trading Regions: The Case of Textile Raw Material Industry.

The UK textile industry was very prosperous in the past but in the 1970s Britain started to import textile materials from abroad. Since 1990, half of its textile materials have been imported from the EEA (European Economic Area), ASEAN (Association of Southeast Asian Nations) and North America countries. Meanwhile, UK imports from China have increased dramatically. Through comparisons, this paper calculates the trade competitiveness index and relative competitive advantages of regions and investigates the impact of Chinese textiles on UK imports from three key free trade regions across the textile sectors in the period 1990-2016 on the basis of United Nation Comtrade Rev. 3. We find that China's textile prices, product techniques, political trade barriers and even tax system have made a varied impact on the UK's imports across related sectors in the context of green trade and the strengthening of barriers, which helps us recognize China's competitiveness in international trading and also provides advice on China's sustainable development of textile exports.

Trends in acquisitions of physician practices and subsequent clinical integration: A mixed methods study.

RATIONALE, AIMS, AND OBJECTIVES: The US health care system is marked by a high degree of fragmentation in both delivery and financing. Some evidence suggests that attempts to reduce fragmentation have led to significant provider consolidation, including hospital acquisitions of physician groups, or "vertical integration." The objective was to use time-series data to quantify trends in and characteristics of hospital acquisitions of physician practices. A secondary objective was to use case studies to determine the motivations for these acquisitions and to identify what integration results from these transactions. METHODS: Data on annual hospital acquisition of physician practices was used to quantify trends and characteristics of acquiring hospitals between 2006 and 2013. Four in-depth case studies, including structured interviews with hospital leadership, were then conducted of recent hospital acquisitions of primary care practices. RESULTS: Acquisitions of physician practices have been increasing over the last decade and peaked in 2011. Most acquisitions were of small primary care, multi-specialty, or cardiology practices. The case studies revealed that the primary motivation for hospital acquisitions was to increase referrals and negotiate higher payment rates. These transactions resulted in very limited clinical integration, while all acquiring hospitals sought to integrate health information systems. CONCLUSIONS: Among 4 case-studies of hospital acquisition of physician practices, the primary motivation was financial and competitive motivations. This suggests that policymakers should be mindful of the potential negative effects of these acquisitions on health care costs, as well as the uncertainty of clinical benefits. Policymakers may need supplementary strategies to deliver the goals of reduced costs and improved quality of care.

Japanese healthcare: Fostering competition and controlling costs.

Japan's universal healthcare system is relatively inexpensive, provides accessible services, and was established nearly 10 years before Canada's. Two aspects of Japan's system are particularly interesting. The first is that there is active competition for patients between a variety of hospital providers, which can be privately or publicly owned. This competition is based on service quality because prices are set centrally. The second feature is that these prices are adjusted biannually by a National Council, the Chuikyo, that includes payers (employers), providers, and third-party experts in public negotiations. This process improves transparency, reduces political stakes, and allows for appropriate fee adjustments. Recent movements in Canada toward more activity-based funding and greater management accountability are developing the capabilities of healthcare executives to embrace these ideas, if introduced in Canada. The increased autonomy afforded to providers will empower their leaders to make strategic decisions to improve the quality and efficiency of healthcare services.