The consequences of hospital autonomization in Colombia: A transaction cost economics analysis
Granting autonomy to public hospitals in developing countries has been common over recent decades, and implies a shift from hierarchical to contract-based relationships with health authorities. Theory on transactions costs in contractual relationships suggests they stem from relationship-specific in...
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ir-10336-241832022-05-02T12:37:14Z The consequences of hospital autonomization in Colombia: A transaction cost economics analysis Castano, Ramon Mills, Anne Colombia Economics Financial management Health care policy Health economics Health insurance Hospital cost Human Organization and management Public hospital Article Health economics Hospital cost Public hospital Colombia Contract Services Health Care Reform Hospital Costs Humans Colombia Contract Services Health Care Reform Hospital Costs Humans Contract incompleteness Developing countries Health care reform Hospital autonomy Information asymmetry Transaction cost economics Public Health Health Hospital Hospital Public Economics Hospitals Insurance Economics Hospitals Insurance Granting autonomy to public hospitals in developing countries has been common over recent decades, and implies a shift from hierarchical to contract-based relationships with health authorities. Theory on transactions costs in contractual relationships suggests they stem from relationship-specific investments and contract incompleteness. Transaction cost economics argues that the parties involved in exchanges seek to reduce transaction costs. The objective of this research was to analyse the relationships observed between purchasers and the 22 public hospitals of the city of Bogota, Colombia, in order to understand the role of relationship-specific investments and contract incompleteness as sources of transaction costs, through a largely qualitative study. We found that contract-based relationships showed relevant transaction costs associated mainly with contract incompleteness, not with relationship-specific investments. Regarding relationships between insurers and local hospitals for primary care services, compulsory contracting regulations locked-in the parties to the contracts. For high-complexity services (e.g. inpatient care), no restrictions applied and relationships suggested transaction-cost minimizing behaviour. Contract incompleteness was found to be a source of transaction costs on its own. We conclude that transaction costs seemed to play a key role in contract-based relationships, and contract incompleteness by itself appeared to be a source of transaction costs. The same findings are likely in other contexts because of difficulties in defining, observing and verifying the contracted products and the underlying information asymmetries. The role of compulsory contracting might be context-specific, although it is likely to emerge in other settings due to the safety-net role of public hospitals. © The Author 2012; all rights reserved. 2013 2020-05-26T00:09:50Z info:eu-repo/semantics/article info:eu-repo/semantics/publishedVersion 14602237 02681080 https://repository.urosario.edu.co/handle/10336/24183 https://doi.org/10.1093/heapol/czs032 eng info:eu-repo/semantics/openAccess application/pdf instname:Universidad del Rosario |
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EdocUR - Universidad del Rosario |
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language |
Inglés (English) |
topic |
Colombia Economics Financial management Health care policy Health economics Health insurance Hospital cost Human Organization and management Public hospital Article Health economics Hospital cost Public hospital Colombia Contract Services Health Care Reform Hospital Costs Humans Colombia Contract Services Health Care Reform Hospital Costs Humans Contract incompleteness Developing countries Health care reform Hospital autonomy Information asymmetry Transaction cost economics Public Health Health Hospital Hospital Public Economics Hospitals Insurance Economics Hospitals Insurance |
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Colombia Economics Financial management Health care policy Health economics Health insurance Hospital cost Human Organization and management Public hospital Article Health economics Hospital cost Public hospital Colombia Contract Services Health Care Reform Hospital Costs Humans Colombia Contract Services Health Care Reform Hospital Costs Humans Contract incompleteness Developing countries Health care reform Hospital autonomy Information asymmetry Transaction cost economics Public Health Health Hospital Hospital Public Economics Hospitals Insurance Economics Hospitals Insurance Castano, Ramon Mills, Anne The consequences of hospital autonomization in Colombia: A transaction cost economics analysis |
description |
Granting autonomy to public hospitals in developing countries has been common over recent decades, and implies a shift from hierarchical to contract-based relationships with health authorities. Theory on transactions costs in contractual relationships suggests they stem from relationship-specific investments and contract incompleteness. Transaction cost economics argues that the parties involved in exchanges seek to reduce transaction costs. The objective of this research was to analyse the relationships observed between purchasers and the 22 public hospitals of the city of Bogota, Colombia, in order to understand the role of relationship-specific investments and contract incompleteness as sources of transaction costs, through a largely qualitative study. We found that contract-based relationships showed relevant transaction costs associated mainly with contract incompleteness, not with relationship-specific investments. Regarding relationships between insurers and local hospitals for primary care services, compulsory contracting regulations locked-in the parties to the contracts. For high-complexity services (e.g. inpatient care), no restrictions applied and relationships suggested transaction-cost minimizing behaviour. Contract incompleteness was found to be a source of transaction costs on its own. We conclude that transaction costs seemed to play a key role in contract-based relationships, and contract incompleteness by itself appeared to be a source of transaction costs. The same findings are likely in other contexts because of difficulties in defining, observing and verifying the contracted products and the underlying information asymmetries. The role of compulsory contracting might be context-specific, although it is likely to emerge in other settings due to the safety-net role of public hospitals. © The Author 2012; all rights reserved. |
format |
Artículo (Article) |
author |
Castano, Ramon Mills, Anne |
author_facet |
Castano, Ramon Mills, Anne |
author_sort |
Castano, Ramon |
title |
The consequences of hospital autonomization in Colombia: A transaction cost economics analysis |
title_short |
The consequences of hospital autonomization in Colombia: A transaction cost economics analysis |
title_full |
The consequences of hospital autonomization in Colombia: A transaction cost economics analysis |
title_fullStr |
The consequences of hospital autonomization in Colombia: A transaction cost economics analysis |
title_full_unstemmed |
The consequences of hospital autonomization in Colombia: A transaction cost economics analysis |
title_sort |
consequences of hospital autonomization in colombia: a transaction cost economics analysis |
publishDate |
2013 |
url |
https://repository.urosario.edu.co/handle/10336/24183 https://doi.org/10.1093/heapol/czs032 |
_version_ |
1740172989958193152 |
score |
12,131701 |