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7 J. Mgmt. & Sustainability 1 (2017)

handle is hein.journals/jms7 and id is 1 raw text is: Journal of Management and Sustainability; Vol. 7, No. 1; 2017 ISSN 1925-4725 E-ISSN 1925-4733 Published by Canadian Center of Science and Education Applying an Extended Kernel Density 4-Step Floating Catchment Area Method to Identify Priority Districts to Promote New Publicly Financed Supply of Gastroenterology Exams Pierre Polzin', Jos6 Borges2 & Ant6nio Coelho2 1 Faculty of Engineering, University of Porto, Portugal 2 INESC TEC Technology and Science, Faculty of Engineering, University of Porto, Portugal Correspondence: Pierre Polzin, R. Dr. Roberto Frias, 4200-464 Porto, Portugal. E-mail: ppolzin@ers.pt Received: December 19, 2016 Accepted: January 4, 2017 Online Published: January 25, 2017 doi: 10.5539/jms.v7n1pl URL: http://dx.doi.org/10.5539/jms.v7n1pl Abstract In continental Portugal, the publicly financed supply of gastroenterology exams was limited since the end of the last century, restricted to a fixed set of private providers that was hired by the Portuguese state. This way of contracting created market entry barriers and is inefficient, since prices are administratively set. Besides, it produced access inequalities, because of the way that the supply was geographically distributed. This paper applies the Extended Kernel Density 4-Step Floating Catchment Area (EKD4SFCA) method to identify priority districts for the promotion of new supply by the state, in order to choose the appropriate way of contracting new private supply, as determined by current law, and to reduce access inequalities. The applied method enables the identification of the Portuguese regions with strong competition between health care providers and where patients' access to publicly financed gastroenterology exams is relatively low. In these regions, the state should promote public bids to stimulate new supply, exploring thereby the potential for setting lower prices and reducing access inequalities. Keywords: spatial analysis, competition analysis, public financing of care provision low case 1. Introduction The EKD4SFCA method provides a combined analysis of competition and access by incorporating the Herfindahl-Hirschman Index (HHI) and a market dominance identification technique in the Extended Kernel Density 2-Step Floating Catchment Area (EKD2SFCA) method (Polzin et al., 2014, 2016). As far as competition analysis is concerned, an innovation of the EKD4SFCA method is the adaptation and extension of the HHI index and of the dominance identification method of Melnik et al. (2008) for their application with small geographic units of analysis, a distance decay function and catchment areas. This way, fine-resolution results are obtained, which provide detailed information that can be useful for public policies in Portugal to manage financing of private health care provision in accordance with the legislation. Actually, since 2013, after Decree-Law 139/2013 came into effect, public financing of diagnostic exams carried out by private health care providers in continental Portugal became dependent on a prior appraisal of the existing competitive situation in health care markets. In competitive geographic markets, public bids have to be promoted to explore competition and attain lower prices. In other regions, free adhesion contracts can be signed, which may facilitate entry of new providers into concentrated markets. This paper presents an application of the EKD4SFCA method to identify priority districts for the promotion of new supply of gastroenterology exams by the state, in order to choose the appropriate way of contracting private supply, as determined by law, and to reduce existing access inequalities. It has been acknowledged that the populations have been facing problems in obtaining colonoscopies in Portugal that lead to insufficient diagnosis and treatment of gastrointestinal diseases. If new supply capacity is not promoted, a heightening of the number of deaths due to malignant neoplasms of colon, rectum and anus should be expected, as the illustrated forecasts from 2014 until 2025 indicate in Figure 1. (Note 1) 1

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