A fair even field competition utilizes the whole community resources, and brings the best out of all market players. For a young aspiring community like our country we need like nothing else a healthy markets for all industries. The health care market insurance, not an exception, needs to have a fair and actively competitive environment. Not only for its own sake, but as it impacts the healthcare provision industry as well. The more competitive the healthcare insurance market, the more viable and efficient the healthcare market itself. Looking at other countries experiences in competition laws and regulations gives us a glimpse of what we can accomplish by enforcing a highly sophisticated pro competition laws. The famous American antitrust laws that dates back to 1800's and started by Sherman law describes number of anti-competition practices that, coupled with a critical market size, would qualify for investigation from relevant authorities and may be a legal action from victim companies. The Sherman law identifies a 40% market dominance by one market player with established anti competitive behaviors to be an attempt to monopolize the market. While any number north of 50% is a monopoly, given there is an established anti-competition behavior on part of the player in question. CR4, a more of market concentration assessment indicator, labels any market to have a monopolistic tendency when 4 companies controls more than 80% of the market. CR4 and HHI are both used to decide if any acquisition or merger can be allowed in order to prevent unhealthy market practices as a result of this merger or acquisition. The current market structure in the Saudi healthcare insurance is highly concentrated with only 3 companies holding 81% and one company holding more than 50% of the market. These numbers would warrant scrutiny in any developed market and would raise many concerns on the vitality of the market. Anti-competitive behaviors include price fixing, price discrimination, abuse of market dominance and others. Price discrimination is a tactic to undermine competition prices with lower prices in selective clients to amass market share for the player, while maintaining a higher prices for the rest of the customer. This tactic enables health insurance companies to claim that they are not engaging in any price undermining practices, as they use it selectively to block competition with smaller clients. The 78th article of the Canadian competition law states that there should be no abuse of dominant market position such as squeezing the profits of vertical suppliers such as hospital and polyclinics to health insurance companies. If there is one thing that is established without doubt in the Saudi healthcare insurance market, that is the insurance companies are maximizing pressure and squeezing life out of small and medium size hospitals and clinics to gain unfair competitive advantage over other insurance companies in the field! Along with highly selective price discrimination places the most dominant health insurance companies in a unfair position for their competition, hospitals, and the society. While insurance companies claim that high market concentration is a standard practice in many developed countries like the US, we should carefully examine the ramifications of such practice. In a recent study in the US where healthcare insurance is highly concentrated and political and legal lobbying prevented anti-trust laws to take effect, mergers between healthcare insurance resulted in higher premiums, lower customer benefits and worse social welfare situation. In Saudi Arabia, corporate and capital market power does not have the capacity to overrule the sense and determination of the young economical development council, and should not succeed in painting the American monopolized market as a model to look up to, maybe, once we can supervene the American model even if it was in the healthcare insurance competition laws and practice standards. * The writer is a CEO of Andalusia Group for Medical Services
