Vertical Integration in the Colombian Health Sector

Revista de Economía Institucional, Vol. 9, No. 17, 2007

30 Pages Posted: 6 Dec 2007

Abstract

Vertical integration in the health sector refers to the government structure designed to coordinate and control attention services in the different states of the value chain, and to facilitate the collaboration and communication between the suppliers. In Colombia, the vertical integration allows insurers (EPS) to provide health services directly through their own centers of attention (IPS). This situation has motivated the EPS to create their own IPS and other modalities of vertical integration or control. This article offers a model of double marginalization for only one EPS and one IPS, and concludes that when the insurance company practices vertical control toward the lender, the benefits are larger than in a scheme of independent firms; also, the final price of the integrated scheme is smaller.

Note: Downloadable document is in Spanish.

Keywords: health economics, industrial organization, vertical integration, health care insurance, profits, prices

JEL Classification: I11, L22

Suggested Citation

Restrepo Zea, Jairo Humberto and Lopera, John Fernando and Rodríguez Acosta, Sandra, Vertical Integration in the Colombian Health Sector. Revista de Economía Institucional, Vol. 9, No. 17, 2007, Available at SSRN: https://ssrn.com/abstract=1039341

Jairo Humberto Restrepo Zea (Contact Author)

Universidad de Antioquia ( email )

Calle 67 No. 53 108
Apartado Aereo
Medellin, 1226
Colombia

John Fernando Lopera

Universidad de Antioquia ( email )

Calle 67 No. 53 108
Apartado Aereo 1226
Medellin
Colombia

Sandra Rodríguez Acosta

Universidad del Norte ( email )

Km5 Via Puerto Colombia
Carrera 58 # 82-84 Apt 6B
Barranquilla, Atlantico
Colombia

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