Access to affordable healthcare is necessary for quality of life and for society’s well-being, as well as to enable individuals to lead a productive life. Healthcare expenditure accounts for a significant proportion of GDP across OECD countries and it is projected to increase further, placing pressure on households and government budgets.
Introducing competition in healthcare markets can contribute to efficiency and quality. Many OECD countries allow some form of competition, particularly through patient choice of providers and, in some cases, insurer choice. At the same time, healthcare markets require ongoing regulation to address information asymmetries, equity concerns and safety. Competition is therefore not a substitute for regulation, but an instrument whose effects depend on regulatory design.
Healthcare systems differ widely and no model consistently outperforms others. This diversity does not weaken the case for the scrutiny of regulation. On the contrary, pro-competitive reforms within existing systems can yield gains. The central challenge for policymakers is to ensure that regulation and competition reinforce rather than undermine each other.
Complementing their enforcement activities in healthcare markets, competition authorities also play a constructive role, one that could be further strengthened in some cases, through advocacy and co-operation with health authorities. By identifying regulations that are more restrictive than necessary and proposing pro‑competitive alternatives that preserve legitimate policy objectives, they complement enforcement efforts and help competition function more effectively, ultimately delivering greater benefits.
While licensing of providers and professionals is necessary to ensure minimum quality standards, certain rules, such as needs‑based entry restrictions, broadly applied minimum activity thresholds, or the involvement of incumbents in licensing decisions, can unduly limit entry, reduce capacity, and weaken incentives to improve quality. Similar concerns arise in professional regulation. Licensing and scope‑of‑practice rules play an important role in protecting patients from low‑quality care, but overly restrictive task definitions and limited licence portability can exacerbate workforce shortages and constrain access.
Provider payment mechanisms also play a central role in shaping competitive dynamics. Each mechanism creates distinct incentives, such as encouraging overprovision or fostering efficiency, and typically combines desirable features with potential drawbacks. Greater awareness of these effects can help competition authorities advocate more effectively for quality, efficiency, and access, while avoiding unintended distortions
Competition between healthcare service providers can only be effective if, on the demand side, patients and payers can make informed choices. Disseminating price and quality information, in a format that is understandable and usable, can support choice. Pro-competitive regulation that incorporates these requirements is therefore a tool that complements the competition assessment of the regulatory framework to identify unduly restrictive regulation.
Digital technologies such as telemedicine and electronic health records offer significant potential to improve efficiency, access, and quality in healthcare, but their uptake and impact remain constrained. Regulatory barriers, such as those potentially arising from professional licensing, pricing and reimbursement, data access, and interoperability, have the potential to slow the scaling of digital health services and cross‑border provision. Addressing these regulatory and technical constraints, while preserving legitimate public policy objectives such as patient safety and data protection, is essential to unlocking the full benefits of digitalisation in healthcare.