ABSTRACT
In response to skyrocketing healthcare expenditures worldwide, policymakers have attempted to introduce market elements in the healthcare sectors of several countries, under the neo-classical assumption that competition will drive innovation, spur efficiency and ultimately contain costs. This chapter providers an overview of competitive forces in healthcare, their theoretical drivers, and empirical outcomes. Starting from the understanding of healthcare system configurations and the varying role of competition in different institutional and regulatory settings, the value-creating potential of competitive elements in the healthcare domain is considered. The structure of competition and its theoretical assumptions are then clarified to subsequently understand competitive outcomes, in terms of influence on entry barriers, innovation and entrepreneurial opportunities. The case of the Dutch healthcare system, the only price-competitive healthcare market in Western Europe, provides an illustrative scenario where to observe competitive dynamics and unexpected consequences of competitive triggers. An interesting entrepreneurial development is exemplified through Dutch independent treatment centers (ITCs), a form of healthcare delivery that has witnessed exponential growth after the introduction of pro-competitive regulation.
