Types of Markets Within the Healthcare Systems; Examples from Balkan and East European Countries

The purpose of the paper is to provide a general framework from microeconomic perspective, for describing various markets within the health care system and to understanding the characteristics of main actors, especially those playing simultaneously the role of supply and of demand. The paper is based on a review of markets within the healthcare systems of Balkan and East European countries using for examples from the WHO monographs (HiT—Health Systems in Transition) on their respective health systems. The markets within the health systems can be grouped in two tiers. Those where the patient is the demand and the provider of health services is the supply, named here front-stage markets. and those where the provider of health services is the demand, and the producers of medical inputs are the supply, named back-stage markets. These markets are analyzed from microeconomic perspective. All of them are imperfect competition markets, where actors’ behavior is specific to the type of market, and suppliers benefit of asymmetric information. Health provider institutions and independent medical practicians play a double role within the health system. On the back-stage markets they are the demand, and simultaneously on the front-stage markets they are the supply. This double role position has important implications on the capacity of these to perform well virtually opposed roles. The paper also discusses how health insurance and government intervention affects those markets. The paper is important for policymakers, because it describes the economic incentives driving the actors in the health care system and their market power. It is useful in designing interventions regarding education of health care managers and efficiency of care delivery.