Barriers To Entry, Entry Regulation And Foundation Of Competition Mechanism Of Health Care Industry

We focus on the central issue of medical reform: competition mechanism of health care market. We have studied whether sufficient competition is needed in this market, and how to establish competition mechanism. The main body of our study is the relationship between competition and market performance of health care market. We got the conclusion that competition is able to promote market performance, and then we studied the economic barriers to entry and entry regulation.There have been plenty of studies about health care market in recent years, but most of them are simple or unilateral. There are few literatures about barriers to entry in this market, which is our study point. The DEA (Data Envelopment Analysis) method which we used has been applied abroad to evaluate health care market efficiency, however, most of these studies are about efficiency only, not the factors that affect efficiency. We did systemic analysis on these two aspects.The main body of this paper is divided into five parts.Partâ… : A review of literatures. There are four aspects: barriers to entry, competition mechanism, barriers to entry and entry regulation of health care market. Schools of Industry Economics have already formed their own theory and research methods concerning barriers to entry, however, studies of competition especially barriers to entry of health care market are not many, neither are they profound.Partâ…¡: The relation between competition and market performance of Chinese health care market. We studied two aspects of market performance: technical efficiency and allocative efficiency. Concerning technical efficiency, we adopted DEA method to analyze three years' data of 31 provinces of China, then we did regression analysis on the efficiency score and several variables, in order to discuss the relation between competition and technical efficiency. Concerning allocative efficiency, we analyze the particularity of health care industry, and then discussed the influence of competition on allocative efficiency of health care market.Partâ…¢: Analysis about barriers to entry of Chinese health care market, especially the characteristic of barriers to entry of different areas and all levels respectively. We summarize status in quo and degree of economic barriers to entry of health care market.Partâ…£: Analysis about the content and rationality of entry regulation of health care market. We indicate the irrationality of entry regulation, which is the most important factor that embarrasses the entrance of Chinese health care market.Partâ…¤: We bring forward policy suggestions in two aspects: reduce all types of economic barriers to entry and relax entry regulation over our health care market.