SPECIALIZATION, OPTION DEMAND, AND THE PRICING OF MEDICAL SPECIALISTS

This paper discusses the supplier power of medical specialists. We arg ue that a combination of factors, including the structure of health ca ve delivery, reimbursement systems, the presence of option demand, and high consumer switching costs, create circumstances in which medical specialists may be able to exercise significant seller power. We explo re the implications of this for the pricing and organization of medica l care.