Economic welfare implications of differently structured vision care markets
- 1Johns Hopkins Bloomberg School of Public Health, Department of Health Management and Policy, Baltimore, MD, USA
- 2Johns Hopkins Bloomberg School of Public Health, Department of International Health, Baltimore, MD, USA
- Kevin D Frick, Johns Hopkins Bloomberg School of Public Health, Department of Health Policy and Management, 624 N. Broadway, Rm. 606, Baltimore MD 21205-1901, USA; kfrick{at}jhsph.edu
There are abundant examples of “economics of ophthalmology” articles in the peer-reviewed literature describing economic evaluations, that is cost–benefit and cost-effectiveness studies comparing the value of policies, guidelines or patient management options.1–5 In health systems with severely limited resources, the ability to compare the value of the cost and outcomes of different policy options is critical. However, while this is not the only tool that economics provides, there are notably fewer examples of peer-reviewed articles that describe analyses of data related to eye care that test whether economic theory describes individual, provider or organisational behaviour.6
Economics provides a set of theories that provide an insight into how incentives that new policies or guidelines create will affect patient, provider and organisational behaviour. Projected behavioural changes can be used to assess the financial and public health impact of new policies and guidelines. One use of economics related to public health ophthalmology is an analysis of how different markets create opportunities to reduce inequities in eye health. This brief overview discusses how economists distinguish among different types of markets and the markets’ welfare implications for consumers and society. Policy makers and analysts in developed and developing health systems need to consider these when deciding whether, and if so how, to regulate changes in markets.
At the extremes, providers of eye care services can be in markets that are competitive or monopolistic. Monopolistic providers can be private for-profit (a physician in an area in which no other provider has chosen to locate), private not-for-profit (a non-governmental organisation (NGO) sponsored individual provider or clinic) or public (a single, local, publicly funded health clinic). Further, monopolistic providers may charge the same price to all consumers or be able to charge different prices to different consumers, that is price discriminate with the …
