ABSTRACT
A common characteristic of managed care and national health systems is the presence of independent institutions that negotiate the reimbursement of health care provision. This chapter develops in detail the economic rationale and policy relevance of the analysis of explicit bargaining processes in health care provision. After an introduction to the basic features of bargaining theory, it moves on to an analysis of bargaining between third-party payers and providers. The main feature is that the outcome of the negotiation in terms of the reimbursement rules has an impact on the competition among providers and on the design of the health insurance contract.
