Hospitals operate in a unique market, which can be entered by distinct participants. Each separate institution, whether already present in a region or recently opened, can affect the functioning of other facilities from the same sector. As a result, such an area is likely to have multiple medical organizations that differentiate to a certain degree but have comparable purposes. Healthcare facilities may lower the chances of unnecessary duplication if those located in one space start affiliating.
To understand how medical institutions collaborating within a region may decrease unnecessary duplication, it is important to explore why such replication exists. When a new hospital with specific qualities appears in an area, an already present hospital will experience shifts in its demand curves (Phelps, 2018). Such changes will happen because patients in the location will have an opportunity to choose between the two institutions (Phelps, 2018). Accordingly, excessive duplication of facilities may occur when new healthcare organizations with similar purposes continue entering the same place while offering services that may be distinct to a certain extent. If hospitals in a particular region begin to affiliate, one may expect that the unnecessary replication of medical establishments would decrease. If the local organizations collaborated instead of competing with each other, there would be no necessity to seek ways to outstand rivals (Phelps, 2018). Consequently, when establishments in one community collaborate, the market becomes stable, and institutions have no incentives to enter or exit (Phelps, 2018). Therefore, the unwarranted duplication of healthcare establishments occurs when new hospitals continue emerging in an area, which may stop if all such institutions join forces.
To conclude, if organizations in the same region start to affiliate, then unnecessary duplication of such facilities may be lower. Hospitals within one space replicate as market players competing for customers represented by patients from one location. However, if the rivalry stopped due to the institutions beginning to collaborate, new facilities would potentially cease entering the region, which would decrease their duplication without a necessity.
Reference
Phelps, C. E. (2018). Health economics (6th ed.). Pearson Publishing.