Competition in the hospital services and hospital mergers

There is competition between hospitals and other health care service providers in many cases. It seems that this competitive environment will lead to a more effective and better service. Thus, governments are increasingly focusing on the application of competition rules to hospital services. Basically; rules of competition do not play any roles in focused and order and control-based services. In contrast, when the competition spreads among hospitals, they will try to reduce the competitive forces and those which have been operating independently will be merged to protect themselves against the competition pressure. When the hospital facilities integrate, this merging can reduce the operating costs. In the absence of market power, competition works most effectively. One of the aspects of market power is high demand versus limited supply of services. To convince the hospitals with the market power to reduce costs and increase efficiency, relying on competition is not a reasonable expectation. Market-oriented solutions will work only when other proper alternatives are available. It means that if policy makers focus on competitive solutions, policies to prevent anticompetitive merging will be of great significance.