Monopolistically Structured Jcaho (Joint Commission on Accreditation of Healthcare Organizations)

1111 Words Jun 20th, 2010 5 Pages
Monopolistically structured JCAHO (Joint Commission on Accreditation of Healthcare Organizations) I chose the monopolistically structured JCAHO (Joint Commission on Accreditation of Healthcare Organizations). They are the only organization that determines whether hospitals or medical facilities are up to their standards enough to receive reimbursement from Medicare and Medicaid. “The Joint Commission is a monopoly because it has unique statutory protection in the USA and collects $113 million in annual revenue; it is the only organization in the USA of this nature” (Joint Commission Requirements, 2009). This revenue is mainly from the fees it charges US hospitals for evaluating their compliance with federal regulations.
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These facilities have to be inspected or surveyed every two years in order to keep up with their accreditation.
This is the only accrediting organization in the USA, and every facility has to comply or go under; therefore JCAHO will always have revenue as long as there are health care facilities desiring reimbursement for providing health care. Also, JCAHO will randomly conduct inspections on facilities, especially if they have received complaints on these facilities (Joint Commission Requirements, 2009). Whether the inspection is planned by the hospital or JCAHO randomly shows up, the hospital still has to pay for the inspection. A hospital will have as many inspections as JCAHO requires for the hospital to prove that it meets the standards required for accreditation.
I do not think this JCAHO industry really has economies of scale. Costs aren’t the reason other organizations can’t enter the market; laws are the reason. As for costs, there aren’t “plants”, this organization does not produce any kind of “product”, just a service. No other organization could possibly enter the market because of the legal barriers, not for cost barriers. If there were no legal barriers, there is no reason that other organizations couldn’t enter the market.
For my next market example, I have chosen the oligopoly of the auto industry. There are only a select few large companies dominating this industry. Namely, the “Big

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