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Bargaining and idle public sector capacity in health care

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  • Xavier Martinez-Giralt

    ()
    (Universitat Autonoma de Barcelona)

  • Barros Pedro Pita

    ()
    (Universidade Nova de Lisboa, Entidade Reguladora dos Serviços Energéticos (ERSE) and CEPR)

Abstract

A feature present in countries with a National Health Service is the co-existence of a public and a private sector. Often, the public payer contracts with private providers while holding idle capacity. This is often seen as inefficiency from the management of public facilities. We present here a different rationale for the existence of such idle capacity: the public sector may opt to have idle capacity as a way to gain bargaining power vis-à-vis the private provider, under the assumption of a more efficient private than the public sector.

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File URL: http://www.accessecon.com/pubs/EB/2005/Volume9/EB-05I10002A.pdf
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Bibliographic Info

Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 9 (2005)
Issue (Month): 5 ()
Pages: 1-8

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Handle: RePEc:ebl:ecbull:eb-05i10002

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  1. A. Michael Spence, 1977. "Entry, Capacity, Investment and Oligopolistic Pricing," Bell Journal of Economics, The RAND Corporation, The RAND Corporation, vol. 8(2), pages 534-544, Autumn.
  2. Pedro Barros & Xavier Martinez-Giralt, 2005. "Negotiation Advantages of Professional Associations in Health Care," International Journal of Health Care Finance and Economics, Springer, Springer, vol. 5(2), pages 191-204, June.
  3. Dixit, Avinash, 1979. "The Role of Investment in Entry-Deterrence," The Warwick Economics Research Paper Series (TWERPS), University of Warwick, Department of Economics 140, University of Warwick, Department of Economics.
  4. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, The MIT Press, edition 1, volume 1, number 0262200716, December.
  5. A. Michael Spence, 1979. "Investment Strategy and Growth in a New Market," Bell Journal of Economics, The RAND Corporation, The RAND Corporation, vol. 10(1), pages 1-19, Spring.
  6. Xavier Martinez-Giralt & Pedro Pita Barros, 2000. "Selecting Negotiation Processes with Health Care," UFAE and IAE Working Papers, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC) 467.00, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
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Cited by:
  1. Luigi Siciliani & Anderson Stanciol, 2008. "Bargaining and the Provision of Health Services," Discussion Papers, Department of Economics, University of York 08/28, Department of Economics, University of York.
  2. Hiroshi Aiura & Yasuo Sanjo, 2010. "Privatization of local public hospitals: effect on budget, medical service quality, and social welfare," International Journal of Health Care Finance and Economics, Springer, Springer, vol. 10(3), pages 275-299, September.

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