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      The effects of market structure and bargaining position on hospital prices

      , , ,
      Journal of Health Economics
      Elsevier BV

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          Abstract

          PPOs and HMOs have gained widespread acceptance due in part to the belief that excess capacity and competitive market conditions can be leveraged to negotiate lower prices with health care providers. We investigated prices obtained in different types of markets by the largest PPO in California. Our findings indicate that greater hospital competition leads to lower prices. Furthermore, as the importance of a hospital to the PPO in an area increases, the price rises substantially. Our testing of alternative methods for defining hospital geographic markets reveals that the common practice of using counties to define the market leads to an underestimate of the price-increasing effects of a merger.

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          Author and article information

          Journal
          Journal of Health Economics
          Journal of Health Economics
          Elsevier BV
          01676296
          October 1992
          October 1992
          : 11
          : 3
          : 217-233
          Article
          10.1016/0167-6296(92)90001-H
          10122537
          4b7c5983-324d-4007-ba87-5ae05c2dacb7
          © 1992

          https://www.elsevier.com/tdm/userlicense/1.0/

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