Understanding the Dynamics Interaction within Indonesia Healthcare Competition

Abstract

This paper is intended to comprehend the dynamics interaction within Indonesia healthcare competition that might lead to the unhealthy conducts resulting in harming society and business harmony. It was analyzed by describing market structure using Porter’s five forces competition based on descriptive analysis approach to determine whether the structure was conducive for unhealthy competition or not. The intensity of competition within industry is low as a result of the weakness of consumer bargaining power, the strong bargaining power of providers, the malfunction of substitution availability, and the barriers of market entry. The pertinent findings include the existing of consumer service and price discrimination due to asymmetry information, the tendency of providers to integrate vertically and horizontally, as well as the dependency of society to public insurance. The result would be relevant to develop Indonesia healthcare policy to minimize unhealthy competition and to maximize the benefit for society. The findings also imply the necessity of further studies to reevaluate and realign the business practices in Indonesia health care industry.

Key words: market structure, healthy business practices, bargain power, entry barriers, substitution, health care industries