Medical education: monopoly or oligopoly?

Medical education: monopoly or oligopoly?

Dear Editor:

Thirty-one countries in the world have no medical schools[1]. This is an imperfect state of affairs. However it is one that is unlikely to last much longer as universities within these countries and medical schools elsewhere move to close the gap.

Another perhaps surprising fact is that 44 countries have just one medical school[1]. These schools have a monopoly in each individual country - another imperfect state of affairs[2]. Some of these countries are quite small and so might only be able to support one school - a so-called natural monopoly. However there are other less natural reasons why a monopoly might be in place. An established institution will likely have lower costs than a new institution - not least because they don't need to worry about start up costs. The government may have given a license only to that medical school to operate within that country. So what effects does a monopoly have on medical education provision? The two main effects are on costs and choice, and they are inter-related. The payer - be that the individual student or the government or the grantgiver - will have no choice but to go with that particular medical school - regardless of the cost .There is no alternative. The lack of choice will likely drive up cost and will certainly not be a driver of quality.

By definition the other countries in the world have more than one medical school. However, there are arguments to suggest that, in many countries, medical schools operate in an oligopoly. In an oligopoly, there is more than one provider and yet the number of providers is limited and there are barriers to new providers. Finally, in an oligopoly, all members know each other very well - they often know each other's structure, processes and outcomes in considerable detail[3]. Certainly, this is true of most medical education systems in most territories. There are two types of oligopoly - collusive oligopolies and non-collusive oligopolies. As the names suggest, in a collusive oligopoly, players collude to limit competition; in a noncollusive oligopoly, there is competition for market share or profit. Could medical schools be part of a collusive or non-collusive oligopoly? There are arguments for both possibilities.

With regard to the argument that there may be a collusive oligopoly, certainly, there are a limited number of medical schools in most countries, and most medical schools within countries know each other well. In most Western countries, there is a very high barrier to entry to the undergraduate medical education field. There is also an element of price collaboration or centering - where a dominant or leading medical school sets its tuition fees and most other schools follow suit. Where collusion is formal, the oligopoly is known as a cartel. One well known cartel is OPEC (Organization of the Petroleum Exporting Countries), and its effect on oil prices has been clear.

In some countries, there may be a non-collusive oligopoly - but that situation is not a great improvement on a collusive oligopoly. In a non-collusive oligopoly, there is competition on both price and product, but the institutions are so close to each other that their strategies are almost fully informed by how their rivals might react to their particular strategies. What in practical terms might this mean for how medical schools provide and price their offerings? There is one clear scenario that might happen - to draw on a sporting analogy one might call it playing for a draw.

Let's take a minute to expand on this sporting analogy. In 1982, West Germany and Austria were playing in the football world cup[4]. If West Germany won the game by one or two goals, both teams wouldgo through to the next round and the others in their group would go home. In the first half, West Germany scored a goal, and then the match promptly descended into farce. Both teams had stopped trying. Playing to score more goals risked a loss - it was much better for both sides to settle for the existing score. The referee could do nothing; the other teams in the group looked on impotently from the sidelines.

Could this be happening in undergraduate medical education - without us even noticing? What incentive is there for a school to emerge a clear winner on quality or price? Is there not a risk that they might be criticised as being too cheap and therefore of low quality? Or that their efforts to drive quality might result in their being criticised for being different? Do they have everything to win and nothing to lose by playing safe?

If this is the case, then what can we do about it? In the instance of monopolies - then the choices are simple: the government could regulate it or break it up. Regulation means ensuring by law that the monopoly provider offers high quality and low cost. Breaking it up means literally splitting up the provider or encouraging and incentivising competitors to enter the playing field. With oligopolies, the solutions depend on the form of oligopoly. A collusive oligopoly may break competition law in a particular country - and in this case the law must be applied. A non-collusive oligopoly requires similar solutions to those applied to a monopoly - mainly by encouraging and incentivising new entrants to the field. Will this happen in medical education and if so what effects might it have? Logic would suggest that it will drive quality up and cost down, but the simple truth is that here we are in unchartered territories.

Dr. Kieran Walsh,

FRCPI, FHEA

BMJ Learning

BMJ Publishing Group.

BMA House,

Tavistock Square,

London WC1H 9JR

UK

Tel: +0207-3836550,

Fax: +0207-3836242,

E-mail:kmwalsh@bmjgroup.com.

The author reported no conflict of interests.

[1] Frenk J, Chen L, Bhutta ZA, Cohen J, Crisp N, Evans T, et al. Health professionals for a new century: transforming education to strengthen health systems in an interdependent world. Lancet 2010;376:1923-58.

[2] http://en.wikipedia.org/wiki/Monopoly (accessed 28.11.2013)

[3] http://en.wikipedia.org/wiki/Oligopoly (accessed 28.11.2013)

[4] http://en.wikipedia.org/wiki/West_Germany_v_Austria_ (1982) (accessed 28.11.2013)

Received 29 November 2013, Accpeted 04 December 2013, Epub 25 December 2013

10.7555/JBR.28.20130189