It does not operate with the usual capitalistic, marketplace conditions of supply and demand, where consumer choice influences price and quality as suppliers seek to provide maximum value to customers. It is inaccurate, however, to conclude that there is no competition in Maine. This is because most individuals personally pay a very minor part of their healthcare bill, and the small amount paid usually does not vary according to whether a high price or lower price provider is selected. Thus, the person making healthcare choices is generally immune from the economic consequences of their decisions. Most government programs do not require client cost participation based on the price differences of the providers selected.
Employers are fearful of employee criticism if individual choice is restricted.
Therefore, employers insist that the health insurance programs they provide to workers include virtually all physicians, hospitals, and other providers. The legislature, with good intention, has passed a whole series of mandates allowing consumers access to health services, further reducing the usual impact of supply and demand based on competitive pricing. HMOs have acquiesced their negotiating position by adopting a strategy that they will contract with every provider in the State. Providers know this, and therefore can extract the level of pricing they seek. To some extent consumers do make choices based on competition between organizations, but they do so based on their perceptions of service, quality, technology, and modern facilities.