07 Feb 2007
Competition Law and Policy in Mexico, 2004
This report on Mexico’s competition law and policy, which was the foundation for a peer review examination in early 2004, is a follow-up to a 1998 OECD assessment. Mexico’s competition commission ("CFC") has become a mature and well-respected agency; however, the degree of general support for competition policy in Mexico remains an open question. The CFC has encountered problems in the courts, and its resources have declined despite an increasing workload. The 2004 report and peer review recommended a number of changes in operations and law to make enforcement and advocacy more effective. In 2006, Mexico revised its basic competition law to incorporate many of these recommendations, such as strengthening investigative powers for onsite inspections, increasing sanctions (including the possibility of orders to divest assets in case of serious, repeat violations) and providing for Senate approval of appointments to the CFC. In response to court rulings that some applications of the previous law were unconstitutional, the revised law now specifies when practices such as predatory pricing, exclusive dealing, cross subsidization and price discrimination would be violations. The merger notification system has been simplified. The amendments have also strengthened the CFC’s roles and powers of advocacy and policy advice in dealing with legislation, regulatory proceedings and other levels of government.
07 Feb 2007
Enhancing Beneficial Competition in the Health Professions
Health professions are overseen by an array of rules and regulations that are justified by the need to protect consumers from unqualified practitioners. The most common method of ensuring practitioner quality is professional licensure. Because health care expertise is necessary to establish the appropriate program of study, training, and examination for new professionals, a licensed profession often directly or indirectly controls its own licensure rules. In this process of selfregulation, a profession exercises its legitimate interest in maintaining the quality of its members. But a self-regulating profession also has the potential to abuse its control over who can practice and how they practice in order to enhance member income.
07 Feb 2007
Competition in the Provision of Hospital Services
Because of the high percentage of national income and government budget typically associated with the provision of hospital services and because there is substantial evidence of hospital services could often be delivered more efficiently than they are, a number of OECD countries have increased the extent to which competitive mechanisms are adopted to increase the efficiency of hospital care delivery. Hospital services are complex set of products and services than comprise many different types of patient-oriented activities and not all services are equally subject to competition. For some services, such as emergency services, a hospital may have few if any competitors. For other services, such as inpatient scheduled surgeries, a hospital may compete for patients with other hospitals that offer comparable care. For still other services, such as diagnostic services, specialist consultations and outpatient services hospitals may at times compete with diagnostic centers, doctors’ offices and ambulatory surgery centers. Competition between providers of hospital services can have a number of impacts, including reducing excessive hospital stays, reducing costs of providing care and improving quality of care. Mechanisms for increasing competition or market forces identified in this paper include: collecting and distributing improved information on provider performance; supporting new entry when entry and exit costs are low; encouraging independent or private operation of facilities; improving allocation of human resources, particularly through reducing anticompetitive restrictions by professionals; introducing prospective pricing in combination with benchmarking; physician-led purchasing; providing for greater consumer choice, particularly when waiting lists are long; introducing contestable management of hospitals; and applying competition law in circumstances where public policy focuses on pro-competitive mechanisms. A competitive mechanism that might work in one system will not necessarily transfer well to another. Moreover, competitive mechanisms may at times increase costs. As health policy makers increase reliance on competitive mechanisms, they may need to think carefully about structural market conditions and potentially involve competition authorities when it appears that participants in the market are acting to restrain or eliminate competition.