Author
Towner, MitchAffiliation
Univ Arizona, Eller Coll ManagementIssue Date
2020-05
Metadata
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INFORMSCitation
Towner, M. (2020). Debt and bargaining outcomes: Evidence from us hospitals. Management Science, 66(5), 2083-2098. https://doi.org/10.1287/mnsc.2019.3291Journal
MANAGEMENT SCIENCERights
Copyright © 2019, INFORMS.Collection Information
This item from the UA Faculty Publications collection is made available by the University of Arizona with support from the University of Arizona Libraries. If you have questions, please contact us at repository@u.library.arizona.edu.Abstract
Using the healthcare industry as a novel laboratory, I study whether a firm's use of debt enhances its bargaining power during negotiations with nonfinancial stakeholders. I find that reimbursement rates negotiated between a hospital and insurers for two homogeneous procedures are higher when the hospital has more debt. This relation is stronger among hospitals with less bargaining power relative to insurers ex ante. The evidence is consistent with the idea that debt improves a firm's bargaining power.Note
12 month embargo; published online: 13 September 2019ISSN
0025-1909EISSN
1526-5501Version
Final accepted manuscriptae974a485f413a2113503eed53cd6c53
10.1287/mnsc.2019.3291