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Selecting Negotiation Processes with Health Care Providers

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  • Pedro Pita Barros
  • Xavier Martinez-Giralt

Abstract

We address the question of how a third-party payer (e.g. an insurer) decides what providers to contract with. Two different mechanisms are studied and their properties compared. A first mechanism consists in the third party payer setting up a bargaining procedure with both providers. The second mechanism is the so-called "any willing provider" where the third-party payer announces a contract and every provider freely decides to sign it or not. The main finding is that the decision of the third-party payer depends on the surplus to be shared. When it is relatively high the third-party payer prefers the any willing provider system. When, on the contrary, the surplus is relatively low, the third-party payer will select a negotiated solution.

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Bibliographic Info

Paper provided by Barcelona Graduate School of Economics in its series Working Papers with number 30.

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Date of creation: May 2003
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Handle: RePEc:bge:wpaper:30

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Related research

Keywords: Bargaining; health care provision; Any willing provider;

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References

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  1. Jofre-Bonet, Mireia, 2000. "Health care: private and/or public provision," European Journal of Political Economy, Elsevier, vol. 16(3), pages 469-489, September.
  2. Davidson, Carl, 1988. "Multiunit Bargaining in Oligopolistic Industries," Journal of Labor Economics, University of Chicago Press, vol. 6(3), pages 397-422, July.
  3. Muthoo,Abhinay, 1999. "Bargaining Theory with Applications," Cambridge Books, Cambridge University Press, number 9780521576475, October.
  4. Xavier Martinez-Giralt & Pedro Pita Barros, 2000. "Negotiation Advantages of Professional Associations in Health Care," UFAE and IAE Working Papers 466.00, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  5. Glazer, Jacob & Glazer, Jacob & McGuire, Thomas G., 1993. "Should physicians be permitted to 'balance bill' patients?," Journal of Health Economics, Elsevier, vol. 12(3), pages 239-258, October.
  6. Vita, Michael G., 2001. "Regulatory restrictions on selective contracting: an empirical analysis of "any-willing-provider" regulations," Journal of Health Economics, Elsevier, vol. 20(6), pages 955-966, November.
  7. Martinez-Giralt, Xavier & Pita Barros, Pedro Luis, 2000. "Public and Private Provision of Health Care," CEPR Discussion Papers 2491, C.E.P.R. Discussion Papers.
  8. Sutton, John, 1986. "Non-cooperative Bargaining Theory: An Introduction," Review of Economic Studies, Wiley Blackwell, vol. 53(5), pages 709-24, October.
  9. Glazer, Jacob & McGuire, Thomas G., 2002. "Multiple payers, commonality and free-riding in health care: Medicare and private payers," Journal of Health Economics, Elsevier, vol. 21(6), pages 1049-1069, November.
  10. Gal-Or, Esther, 1999. "The profitability of vertical mergers between hospitals and physician practices," Journal of Health Economics, Elsevier, vol. 18(5), pages 621-652, October.
  11. Esther Gal-Or, 1997. "Exclusionary Equilibria in Health-Care Markets," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 6(1), pages 5-43, 03.
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