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Bargaining and idle public sector capacity in health care

  • Xavier Martinez-Giralt

    ()

    (Universitat Autonoma de Barcelona)

  • Barros Pedro Pita

    ()

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

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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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. Pedro Pita Barros & Xavier Martinez-Giralt, 2003. "Negotiation Advantages of Professional Associations in Health Care," Working Papers 81, Barcelona Graduate School of Economics.
  2. Xavier Martinez-Giralt & Pedro Pita Barros, 2000. "Selecting Negotiation Processes with Health Care," UFAE and IAE Working Papers 467.00, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  3. Dixit, Avinash, 1979. "The Role of Investment in Entry-Deterrence," The Warwick Economics Research Paper Series (TWERPS) 140, University of Warwick, Department of Economics.
  4. A. Michael Spence, 1977. "Entry, Capacity, Investment and Oligopolistic Pricing," Bell Journal of Economics, The RAND Corporation, vol. 8(2), pages 534-544, Autumn.
  5. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, June.
  6. A. Michael Spence, 1979. "Investment Strategy and Growth in a New Market," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 1-19, Spring.
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