The effects of market concentration on health care price and quality in hospital markets in Ibadan, Nigeria

Abstract

Evidence about the Nigerian health indicators show that the quality of health care in Nigeria is low and inflation of health care prices also persists. Theoretically, by observing the market concentration, inferences can be drawn as to how hospitals conduct themselves, which allows the evaluation of the market performance. Therefore, the effects of market concentration on the health care price and quality were examined.Market concentration was measured by Herfindahl Hirschman Index (HHI) and four hospital concentration ratios (CR 4 ). The values of HHI were disaggregated into the less and more concentrated markets. Quality of health care was measured by the staff-nurse-patient ratio. Ordinary Least Square (OLS) was used to estimate the effects of market concentration on price and quality of health care.The price of health care was found to be 13.4% lower in the less concentrated markets than in the more concentrated market. Income significantly and positively influenced health care prices by 17.8%. Also, a low HHI lead to 33.4% increase in Staff-nurse Patient Ratio (SPR) indicating that the quality of health care was higher in less concentrated markets as hospitals increased the treatment intensity via staff-nurse patient ratio.A less concentrated market is linked with higher health care quality and lower health care prices. Therefore, a strategy that will reduce market concentration so as to enhance consumer welfare in terms of price and quality is recommended.

A time series analysis of government expenditure and health outcomes in Nigeria

“…Inadequate funding and bureaucratic barriers threaten the few existing public health facilities. 5 Despite the country’s growing population, the Nigerian Bureau of Statistics reports that no new hospitals have been added to the approximately 3,500 secondary and tertiary health facilities since 2004. Fewer health facilities and insufficient funding may hinder the improvement of healthcare services and reduce the population’s access to affordable healthcare while increasing the production of lower-quality healthcare services.…”

“…Fewer health facilities and insufficient funding may hinder the improvement of healthcare services and reduce the population’s access to affordable healthcare while increasing the production of lower-quality healthcare services. Health care of a lower standard often leads to unsatisfactory healthcare, which deteriorates the health status of patients, resulting in complications that may support millions of premature deaths and contribute to an adverse health outcome for the country 5 . Because of low public health expenditures, the average citizen’s health has not improved; instead, it has remained consistently low.…”