Lazy Monopoly vs Competing Organization: A Case of St. Petersburg Health Insurance System

Abstract

The paper analyzes the activity of medical organizations in Russian health insurance system. A conception of “exit”, “voice” and “loyalty” by A. Hirschman is used to reveal the position of health care consumers . On the basis of researches that have been conducted in 2003, 2005 and 2007 the paper proves the idea that the majority of public health care organizations presents “lazy monopoly”. In a market without competition, consumers who do not express their dissatisfaction by exercising their right of “exit” (in this case by changing doctor or provider of health services within compulsory medical insurance system) or of “voice” are encouraged to go to another market – either to pay for services at public institutions or to turn to private organizations. As a result, public clinics do not lose money and are not motivated to improve performance and quality. The paper includes analysis of some tools which could make health organizations to become less “lazy”, such as introduction of competition between health insurance organizations, increase of physicians salary, etc.