Does Price Competition Drive Cooperation in Health Care? A Stochastic Actor Oriented Model Analysis

Abstract

Pro-competitive reforms have been enacted throughout Western healthcare systems despite mixed evidence of their effect. Although healthcare organizations competing under non-price competition have been shown to cooperate using patient transfers, little is known about cooperative strategies of healthcare organizations in price-competitive healthcare markets. This paper investigates a novel and understudied form of inter-hospital cooperation described as potentially hazardous to well-functioning healthcare markets, namely the act of sharing medical specialists between hospitals. In particular, it investigates the influence of price-competition on cooperative hospital strategies. We use a stochastic actor-oriented model to analyze the cooperative dynamics amongst 94 general and academic hospitals in the Netherlands between 2010 and 2015. Our results show that, in a price-competitive healthcare sector, hospitals predominantly cooperate with their direct competitors. However, the ratio of price-competitive to ...