Transparency and Negotiated Prices: The Value of Information in Hospital-Supplier Bargaining / Matthew Grennan, Ashley Swanson.

Format:

Book

Author/Creator:

Grennan, Matthew.

Contributor:

National Bureau of Economic Research.

Swanson, Ashley.

Series:

Working Paper Series (National Bureau of Economic Research) no. w22039.

NBER working paper series no. w22039

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Transparency and Negotiated Prices

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2016.

Summary:

Using a detailed dataset of hospitals' purchase orders, we find that information on purchasing by peer hospitals leads to reductions in the prices hospitals negotiate for supplies. Identification is based on staggered access to information across hospitals over time. Within coronary stents, reductions are concentrated among hospitals previously paying relatively high prices and for brands purchased in large volumes, and are consistent with resolving asymmetric information problems. Estimates across a large number of other important product categories indicate that the effects of information are largest in both absolute and relative terms for physician preference items (PPIs). Among PPIs, high-price, high-quantity hospital-brand combinations average 3.9 percent savings, versus 1.6 percent for commodities.

Notes:

Print version record

February 2016.