Greater Memphis Healthcare Market

With 21 hospitals in Shelby County,Tennessee, one may wonder about the huge Healthcare market in the Memphis area and the market must be a near perfect competitive one. As we know a perfectly competitive market is a market where competition is at its highest level with multiple competitors and Knowledge is freely available to all participants, which means that risk-taking is minimal and the role of the entrepreneur is limited.  Neo-classical economists argued that perfect competition would produce the best possible outcomes for consumers, and society. On a quick glance to this hospitals reveal that there are actually 8 different entities who owns them. Of these, Baptist healthcare has 5 of them (not counting the ones they own in the neighboring counties in TN, MS and AR) and Methodist healthcare owns 6 of them (not counting their Olive Branch hospital in MS). Further, we can see  that Methodist Healthcare defines 41% market share, Baptist Health continues to hold the next leading market share at approximately with 33%, with for-profit Tenet a distant third with 14% and Regional One Health at under 10% (2013 data). With 74% market shared by the top two giants, it is fair to say that Memphis market is definitely not a competitive market but more of an Oligopoly one. An oligopoly is a market structure in which only a few firms dominate at a time and market share is uneven. To compare the present Memphis market one can compare this with the present Airline industry in the US or the Telecom industry with a few giants covering most of the consumer base. This type of market gives more power and freedom to the major players but “with great power comes great responsibility". Methodist and Baptist healthcare will have to continue the legacy of high quality service at a competitive price otherwise the consumers will suffer.


The listed hospitals in Shelby County, TN:

Baptist Mem. Restorative Care Hospital
Baptist Memorial Hospital for Women
Baptist Memorial Hospital-Collierville
Baptist Memorial Hospital-Memphis
Baptist Rehabilitation-Germantown
Delta Medical Center
Department of Veterans Affairs Medical Center
HealthSouth Rehabilitation Hospital Memphis
HealthSouth Rehabilitation Hospital North
Methodist Le Bonheur Children's Hospital
Methodist Extended Care Hospital
Methodist Le Bonheur Germantown Hospital
Methodist North Hospital
Methodist South Hospital
Methodist University Hospital
Regional One Health
Regional One Health Extended Care Hospital
Saint Francis Hospital
Saint Francis Hospital-Bartlett
Select Specialty Hospital-Memphis
St. Jude Children's Research Hospital

Methodist Healthcare's flagship hospital in downtown Memphis

Disclaimer: Opinions expressed are solely personal and do not express the views or opinions of any other person or entity.

Source:
http://www.economicsonline.co.uk/Business_economics/Perfect_competition.html
https://www.moodys.com/research/Moodys-affirms-Methodist-Le-Bonheur-Healthcares-TN-A2-and-A2VMIG--PR_310428
http://www.economicsonline.co.uk/Business_economics/Oligopoly.html
http://www.methodisthealth.org/about-us/our-culture/affiliations.dot