Public healthcare interests require strict competition enforcement

Several countries have introduced competition in their health systems in order to maintain the supply of high quality health care in a cost-effective manner. The introduction of competition triggers competition enforcement. Since healthcare is characterized by specific market failures, many favor healthcare-specific competition enforcement in order not only to account for the competition interest, but also for the healthcare interests. The question is whether healthcare systems based on competition can succeed when competition enforcement deviates from standard practice.

This paper analyzes whether healthcare-specific competition enforcement is theoretically sound and practically effective. This is exemplified by the Dutch system that is based on regulated competition and thus crucially depends on getting competition enforcement right.

Governments are responsible for correcting market failures. Markets are responsible for maximizing the public healthcare interests. By securing sufficient competitive pressure, competition enforcement makes sure they do. When interpreted according to welfare-economics, competition law takes into account both costs and benefits specific market behavior may have for healthcare. Competition agencies and judiciary are not legitimized to deviate from standard evidentiary requirements. Dutch case law shows that healthcare-specific enforcement favors the healthcare undertakings concerned, but to the detriment of public health care.

Healthcare-specific competition enforcement is conceptually flawed and counterproductive. In order for healthcare systems based on competition to succeed, competition enforcement should be strict.