 The effects of hospitals' governance on optimal contracts: Bargaining vs. contractingMatteo Galizzi and Marisa Miraldo Journal of Health Economics, 2011, vol. 30, issue 2, 408-424 Abstract: We propose a two-stage model to study the impact of different hospitals' governance frameworks on the optimal contracts designed by third-party payers when patients' disease severity is the private information of the hospital. In the second stage, doctors and managers interact within either a bargaining or a contracting scenario. In the contracting scenario, managers offer a contract that determines the payment to doctors, and doctors decide how many patients to treat. In the bargaining scenario, doctors and managers strategically negotiate on both the payment to doctors and the number of patients to treat. We derive the equilibrium doctors' payments and number of treated patients under both scenarios. We then derive the optimal contract offered by the government to the hospital in the first stage. Results show that when the cost of capital is sufficiently low, the informational rent is lower, and the social welfare is higher, in the contracting scenario. Keywords: Strategic; bargaining; Optimal; contracts; Hospitals; Asymmetric; information (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jhecon:v:30:y:2011:i:2:p:408-424 Access Statistics for this article Journal of Health Economics is currently edited by J. P. Newhouse, A. J. Culyer, R. Frank, K. Claxton and T. McGuire More articles in Journal of Health Economics from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.