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Xavier Martinez-Giralt and Barros Pedro Pita
''Bargaining and idle public sector capacity in health care''
( 2005, Vol. 9 No.5 )
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: I1 - Health: General
I0 - Health, Education, and Welfare: General
Manuscript Received : Mar 03 2005 Manuscript Accepted : Jul 17 2005

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