Competition in the Health Insurance system in Brazil

Abstract

In this paper we investigate the concentration in health insurance sector in Brazil. In order to conduct this analysis it is necessary to establish the definition of relevant market in product and geographical dimensions. In this paper we apply a methodology based on gravitation models to define the geographi¬cal market. Till now the concentration analysis was performed in Brazil using geopolitical boundaries as the market definition. This alternative methodology should be better than Geopolitical boundaries once Brazil is specially large and heterogeneous country. We assume that health services are locally demanded and supplied. In that manner the market area is defined by the flow of trade. This flow is conditioned on health services supply, potential demand and friction variables. The empirical analysis was conducted using database sourced by the National Health Insurance Agency in Brazil – Agência Nacional de Saúde Suplementar (ANS) – to 2007 and 2010. We analyzed the competition structure performing concentration indexes. Our results point out that health insurance sector in Brazil is concentrated.