A lot of markets can't support more than a couple of competitors. And in many cases, you can't easily open a new company because of upfront expenses. E.g.: an emergency room.
> And in many cases, you can't easily open a new company because of upfront expenses. E.g.: an emergency room.
Let me introduce you to the Certificate of Need.
If you want to open a new hospital or facility like this in a town, you need a Certificate of Need from the Department of Health in your state. This ostensibly shows that there is a need for your facility because it is underserved. In actuality, it asks your competitors to say whether they'd reduce services or close beds if you opened your facility. While there is some community research etc., a lot of it comes down to "do your competitors think they can stay profitable enough if you open up shop?", and if they don't, no CoN for you.
This is true but to use your example of an emergency room:
It's not uncommon in more rural areas to find a business that is essentially "more than an urgent care but less than an emergency room". e.g. they aren't doing trauma surgery but they can deal with broken limbs, severe lacerations etc that an urgent care couldn't handle.
My point is that while it's true that there are "step functions" in certain services, this is not always the case.
When it's an essential service for "everyone", and the economics make healthy competition unworkable, the traditional solutions have been municipal ownership and publicly regulated utilities. Those include Fire Departments, Water & Sewer Dept's, Electric & Gas companies, ...
I remember watching a discussion about privatizing the local fire department aka the town pays a private company to run the fire department.
Opposition folks use the line:
"You used to have a shield on your building that denoted you had paid for fire coverage. The old fire departments would drive past the unshielded buildings while fighting the fires."
(this is, of course, no longer the case but love to mention this discussion when ever privatization comes up)
This is fairly recent. And of course even if you have coverage, there's no real guarantees.
Grants Pass, Oregon, has privatized fire. And there's three companies that service it, one is good, one is alright and the other... well, I was going to tell you to watch a YouTube video but after years its been deleted. Some hints: Title "Worst Fire Department in America". They roll up to a fully involved house fire with two engines that are 50+ years old, are hamstrung by the fact that they are staffed with kids in jeans and wildland coats (bunker gear, let alone SCBA, are nowhere to be seen), actually getting water on the fire is an issue because 1) someone has to sit in the cab to keep their foot on the throttle to give the pump any power (this "notmally" is controlled from the panel) and even then the pump is screaming at 3000+ rpm about to die any minute (this is maybe 2, 2.5 times what the pump runs at), there's no sense of strategy.
They call for mutual aid from Rural/Metro who shows up, helps them get a little ground on the fire, only to be told to leave the scene (so the company doesn't have to pay them) and the fire predictably takes over. It was horrific.
At least, though after too many of these calls, the Oregon Fire Marshal actually de-certified this company.
Let me introduce you to the Certificate of Need.
If you want to open a new hospital or facility like this in a town, you need a Certificate of Need from the Department of Health in your state. This ostensibly shows that there is a need for your facility because it is underserved. In actuality, it asks your competitors to say whether they'd reduce services or close beds if you opened your facility. While there is some community research etc., a lot of it comes down to "do your competitors think they can stay profitable enough if you open up shop?", and if they don't, no CoN for you.