An odd thing happens when discussing health care in America.
Otherwise intelligent people make seemingly contradictory points.
Despite a general concern that health care competition is too
localized, meaning low volumes of procedures and low levels of
specialization, Michael Porter and Elizabeth Olmstead Teisberg lament the lack of local competition due to consolidation.
Of
course, there is nothing contradictory in the desire for both
competition and specialization — specialization is how most firms
respond to competition. But among health care providers, mergers
eliminate competition and Certificate of Need (CON) laws prevent new competitors from entering the market. They write:
In North Carolina, only 18 of 100 counties were served by multiple hospital systems in 2000. [footnote – Sizable markets, such as Asheville and Greensboro, North Carolina, have gone from two hospital systems to one.]
