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Market structure and hospital-insurer bargaining in the Netherlands.

Halbersma RS, Mikkers MC, Motchenkova E, Seinen I - Eur J Health Econ (2010)

Bottom Line: In the SCP-model, we find that the market shares of hospitals (insurers) have a significantly positive (negative) impact on the hospital price-cost margin.In the bargaining model, we find a significant negative effect of insurer concentration, but no significant effect of hospital concentration.In both models, we find a significant impact of idiosyncratic effects on the market outcomes.

View Article: PubMed Central - PubMed

Affiliation: The Dutch Healthcare Authority, Postbus 3017, 3502 Utrecht, GA, The Netherlands.

ABSTRACT
In 2005, competition was introduced in part of the hospital market in the Netherlands. Using a unique dataset of transactions and list prices between hospitals and insurers in the years 2005 and 2006, we estimate the influence of buyer and seller concentration on the negotiated prices. First, we use a traditional structure-conduct-performance model (SCP-model) along the lines of Melnick et al. (J Health Econ 11(3): 217-233, 1992) to estimate the effects of buyer and seller concentration on price-cost margins. Second, we model the interaction between hospitals and insurers in the context of a generalized bargaining model similar to Brooks et al. (J Health Econ 16: 417-434, 1997). In the SCP-model, we find that the market shares of hospitals (insurers) have a significantly positive (negative) impact on the hospital price-cost margin. In the bargaining model, we find a significant negative effect of insurer concentration, but no significant effect of hospital concentration. In both models, we find a significant impact of idiosyncratic effects on the market outcomes. This is consistent with the fact that the Dutch hospital sector is not yet in a long-run equilibrium.

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Most frequently performed procedures in the competitive segment
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Fig1: Most frequently performed procedures in the competitive segment

Mentions: The competitive segment is restricted to uncomplicated, elective care and consists of the more standardized and frequently performed (surgical) procedures such as cataract surgery, knee and hip replacements, incontinence surgery and diabetes care. It consists of 1,376 different DBCs, which cover 15 (out of 24) different medical specialties and belong to 28 different diagnoses. See Fig. 1 in the appendix for an overview of the most frequently performed procedures in the competitive segment. The composition of the initial version of the competitive segment was partly based on political reasons such as covering as many medical specialties as possible and total expenditures not exceeding 10%. For a more detailed list of the included procedures, we refer to Dutch Healthcare Authority [9] and [10].Fig. 1


Market structure and hospital-insurer bargaining in the Netherlands.

Halbersma RS, Mikkers MC, Motchenkova E, Seinen I - Eur J Health Econ (2010)

Most frequently performed procedures in the competitive segment
© Copyright Policy
Related In: Results  -  Collection

Show All Figures
getmorefigures.php?uid=PMC3197939&req=5

Fig1: Most frequently performed procedures in the competitive segment
Mentions: The competitive segment is restricted to uncomplicated, elective care and consists of the more standardized and frequently performed (surgical) procedures such as cataract surgery, knee and hip replacements, incontinence surgery and diabetes care. It consists of 1,376 different DBCs, which cover 15 (out of 24) different medical specialties and belong to 28 different diagnoses. See Fig. 1 in the appendix for an overview of the most frequently performed procedures in the competitive segment. The composition of the initial version of the competitive segment was partly based on political reasons such as covering as many medical specialties as possible and total expenditures not exceeding 10%. For a more detailed list of the included procedures, we refer to Dutch Healthcare Authority [9] and [10].Fig. 1

Bottom Line: In the SCP-model, we find that the market shares of hospitals (insurers) have a significantly positive (negative) impact on the hospital price-cost margin.In the bargaining model, we find a significant negative effect of insurer concentration, but no significant effect of hospital concentration.In both models, we find a significant impact of idiosyncratic effects on the market outcomes.

View Article: PubMed Central - PubMed

Affiliation: The Dutch Healthcare Authority, Postbus 3017, 3502 Utrecht, GA, The Netherlands.

ABSTRACT
In 2005, competition was introduced in part of the hospital market in the Netherlands. Using a unique dataset of transactions and list prices between hospitals and insurers in the years 2005 and 2006, we estimate the influence of buyer and seller concentration on the negotiated prices. First, we use a traditional structure-conduct-performance model (SCP-model) along the lines of Melnick et al. (J Health Econ 11(3): 217-233, 1992) to estimate the effects of buyer and seller concentration on price-cost margins. Second, we model the interaction between hospitals and insurers in the context of a generalized bargaining model similar to Brooks et al. (J Health Econ 16: 417-434, 1997). In the SCP-model, we find that the market shares of hospitals (insurers) have a significantly positive (negative) impact on the hospital price-cost margin. In the bargaining model, we find a significant negative effect of insurer concentration, but no significant effect of hospital concentration. In both models, we find a significant impact of idiosyncratic effects on the market outcomes. This is consistent with the fact that the Dutch hospital sector is not yet in a long-run equilibrium.

Show MeSH