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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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Total number of hospitals
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Fig3: Total number of hospitals

Mentions: Apart from hospitals, there are also so-called Independent Treatment Centers (ZBCs) active in the market for hospital care. These ZBCs were allowed to enter the market from 1998. In recent years, the proliferation in the number of ZBCs has been in contrast to the steady concentration of hospitals (see Figs. 2, 3).Fig. 2


Market structure and hospital-insurer bargaining in the Netherlands.

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

Total number of hospitals
© Copyright Policy
Related In: Results  -  Collection

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

Fig3: Total number of hospitals
Mentions: Apart from hospitals, there are also so-called Independent Treatment Centers (ZBCs) active in the market for hospital care. These ZBCs were allowed to enter the market from 1998. In recent years, the proliferation in the number of ZBCs has been in contrast to the steady concentration of hospitals (see Figs. 2, 3).Fig. 2

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