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Intermunicipal health care consortia in Brazil: strategic behavior, incentives and sustainability
Author(s) -
Teixeira Luciana,
Bugarin Mauricio,
Dourado Maria Cristina
Publication year - 2006
Publication title -
the international journal of health planning and management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.672
H-Index - 41
eISSN - 1099-1751
pISSN - 0749-6753
DOI - 10.1002/hpm.860
Subject(s) - general partnership , incentive , business , sustainability , payment , default , public economics , health care , finance , economics , economic growth , market economy , ecology , biology
This article studies strategic behavior in municipal health care consortia where neighboring municipalities form a partnership to supply high‐complexity health care. Each municipality partially funds the organization. Depending on the partnership contract, a free rider problem may jeopardize the organization. A municipality will default its payments if it can still benefit from the services, especially when political pressures for competing expenditure arise. The main result is that the partnership sustainability depends on punishment mechanisms to a defaulting member, the gains from joint provision of services and the overall economic environment. Possible solutions to the incentive problem are discussed. Copyright © 2006 John Wiley & Sons, Ltd.