THE ECONOMIC-BASIS OF HYDE - ARE MARKET POWER AND HOSPITAL EXCLUSIVE CONTRACTS RELATED
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There are three ways in which a hospital can arrange for medical service delivery: hire physicians as hospital employees; contract with a professional organisation to be the sole supplier; adopt an open staff policy. When a hospital signs an exclusive contract it limits the choices of nonparties to the contract. The article explores the conditions under which a hospital exclusive contract might -in principle- injure competition and lead to antitrust litigation. It concludes that, whatever the diverse reasons why, under certain circumstances, hospitals and the hospital based physician find it in their mutual interest to contract exclusively, conferring market power on the favored specialist does not appear to be one of them.
