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Bargaining and idle public sector capacity in health care

Xavier Martinez-Giralt () and Pedro Barros ()

Economics Bulletin, 2005, vol. 9, issue 5, 1-8

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.

JEL-codes: I1 I0 (search for similar items in EconPapers)
Date: 2005-07-17
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