1. If you were a hospital administrator, how would you react when a number of patients and companies started asking for price negotiations, including presenting quotes from companies like IndUShealth? First, bargain buying is when you cost less than fair market value. of its net assets. “Differences in bargaining power are commonplace and do not necessarily warrant public oversight or even intervention, because such intervention inevitably has unintended adverse side effects. » (Frank A. Sloan, Donald H. Taylor, Jr., Christopher J. Conover, 2000) If I were a hospital administrator, I would keep in mind the idea that greater transparency is always better for consumers and that price disclosure improves hospital negotiations. Providing pricing information to relevant providers will also help answer any questions businesses and patients may have and ensure joint decision-making is made by the doctor and hospital on which provider to go to. purchase its products, which will satisfy the clinical preferences of doctors and improve hospital performance. finances. I would explain that "the price is right if the cash flows generate a rate of return equal to the cost of capital." Because community equity includes a range of social benefits, some of which are intangible, comparisons of private rates of return with the cost of capital provide an inadequate indication of the value of the transaction to the seller. Hospitals are primarily concerned with the number of patients they see and how to minimize their expenses through the reimbursements and payments they receive from payers. Additionally, when using transparent costs, insurance companies can and will use competitor pricing information as bargaining leverage to negotiate lower prices on b...... middle of paper .. .... effective. Works CitedBrand, K., Gowrisankaran, G. and Nevo, A. (2012). Mergers when prices are negotiated: Evidence from the hospital sector. Federal Trade Commission. Floyd, E. (November 2013). Regulation of transparency, negotiation and pricing of healthcare. Frank A. Sloan, Donald H. Taylor, Jr., Christopher J. Conover. (2000, January). Hospital Conversions: Is the Purchase Price Too Low? . Retrieved from National Bureau of Economic Research: http://www.nber.org/chapters/c6758.pdf Horowitz, MD (November 13, 2007). Medical tourism: globalization of the healthcare market. Retrieved from MedGenMed: http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2234298/Luigi Bertinato, Marina Canapero. (2008, January). UNWTO World Tourism Barometer. Retrieved from Asian Hospitals and Healthcare Management: http://www.asianhhm.com/healthcare_management/health_tourism.htm