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Competition Is Needed in Health Care,
FTC/DOJ Study Says

December 11, 2004

A recent report by the Federal Trade Commission (FTC) and the Department of Justice (DOJ) calls for greater competition in the U.S. health-care system. The study found that "prerequisites for fully competitive [health-care] markets are not fully satisfied." In other words, our nation lacks a truly competitive medical system.

The 361-page report, "Improving Health Care: A Dose of Competition," addresses several key issues of particular interest to Health Freedom Watch readers. The study points out that consumers have better information about the price and quality of automobiles than they do about most health-care services. "It is difficult to get good information about the price and quality of health care goods and services," the study notes. "Without good information, consumers have more difficulty identifying and obtaining the goods and services they desire."

State licensing also was examined in the report. "Empirical studies have found that licensing regulation increases costs for consumers," the study notes. "There are fewer studies on the impact of licensure on quality, and these studies have found mixed results....[However], studies consistently have found that state-based licensure can harm consumer welfare by serving as a barrier to provider mobility."

Source: "Improving Health Care: A Dose of Competition," July 2004, Federal Trade Commission/Department of Justice (www.usdoj.gov/atr/public/health_care/204694.htm).