Coordination of a fresh agricultural product supply chain with option contract under cost and loss disruptions.

This paper analyzes the option coordination problem of a fresh agricultural product supply chain under two supply chain structures, when the production cost and the loss rate are disrupted simultaneously. This paper provides the explicit option coordination conditions for the disrupted supply chain under two supply chain structures, and then explores the effects of the disruptions and supply chain structure on the option coordination conditions. The results suggest that it is unfavorable to apply the original coordinating contracts without disruptions to coordinate the disrupted supply chain. The coordination of the disrupted supply chain can be achieved with knowledge of the distribution of demand. In two coordinating contracts for the disrupted supply chain, the exercise price is still at the original level without disruptions while the option price deviates from the original level without disruptions. Moreover, the relationships of the coordination conditions in two supply chain structures depend on the value of the profit allocation coefficient. When the profit allocation coefficient exceeds (falls behind) a certain threshold, the option price is set at a higher (lower) value in the supplier-led supply chain structure than in the distributor-led supply chain structure, while the exercise price is set at a lower (higher) value in the supplier-led supply chain structure than in the distributor-led supply chain structure. Finally, the disrupted supply chain with any supply chain structure will perform better in the modified coordinating contracts than in the original coordinating contracts without disruptions.

Pricing and coordination in a dual-channel supply chain with a socially responsible manufacturer.

This paper aims at designing coordination contract in a dual channel supply chain (DCSC) which consists of a socially responsible manufacturer and a retailer. We build stylized game models under both centralized and decentralized scenarios. Then, we identify the reason for supply chain inefficiency under decentralized scenario. Further, according to the manufacturer's corporate social responsibility (CSR) coefficient, we design two different contracts to achieve coordination. We find that with the impact of CSR, social welfare under centralized scenario is always higher than that under decentralized scenario. However, profit of the whole supply chain between the two scenarios has different relationship. More specifically, when CSR coefficient is relatively low, profit under centralized scenario is higher than that under decentralized scenario. When CSR coefficient is high, profit under centralized scenario is lower than that under decentralized scenario. Due to these two cases, we respectively design revenue sharing contract with franchise fee and wholesale price contract with franchise fee and government subsidy to achieve coordination. The result suggests that encouraging the manufacturer to bear CSR properly can reach a multi-win for social welfare, consumers and supply chain members through coordination contract. However, when CSR coefficient is higher than a certain threshold, conflict between supply chain members becomes irreconcilable which results in the retailer's resistance. In this condition, only through subsidy from government or philanthropic organization can supply chain members sustain their cooperation.

An empirical analysis of hospital ED pricing power.

OBJECTIVES: Empirical evaluation of market power that hospitals gain over health plans through hospitals' ability to cancel their contracts with plans while keeping large shares of plans' emergency patients and getting paid for them at above-market rates. STUDY DESIGN: Case-study analysis of 5 California hospitals that initially had contracts with most commercial health plans and then cancelled all those contracts at the same time. METHODS: We conducted a before-and-after case-study analysis comparing volume, price, and net revenues for the 5 study hospitals 3 years before and up to 4 years after the cancellation of their commercial contracts. The volume and price trends in study hospitals were compared with data on control hospitals in the same geographic area over the matching study period. RESULTS: Despite substantially increasing their prices on a noncontracted basis, the 5 study hospitals collectively retained 50% of their commercial health plan volume in first 2 years after the cancellation and 41% of their commercial volume in years 3 and 4, with net commercial revenues increasing as a result. At the same time, the simulated costs of treating the patients from out-of-network hospitals more than doubled for the health plans. CONCLUSIONS: In hospital-payer negotiation, many hospitals have an upper hand: Their threat to retain large portions of their emergency patients and revenues after becoming out of network is credible and it imposes disproportionate costs on the payers, which partially explains the continuing rise in hospital prices.

Financial Performance of Medicare Advantage Contracts in 2014 and Plan Renewal, Consolidation, and Termination Rates in the Subsequent Year.

BACKGROUND: Starting in 2014, the Affordable Care Act mandated that Medicare Advantage (MA) contracts spend at least 85% of total revenue on claims and quality improvement [ie, the medical loss ratio (MLR)] and submit revenue and cost data annually in MLR reports. These reports can improve transparency of the financial performance of MA contracts. However, little is known about revenues and costs of insurers that participate in MA and its impacts on status changes in the following year. OBJECTIVE: To characterize revenues and costs of MA contracts in 2014, with a focus on MLRs and gross margins, and to assess heterogeneity in subsequent-year plan renewal and termination rates by gross margins. RESEARCH DESIGN: Cross-sectional data from MLR reports submitted in 2014 by MA contracts and from 2015 Part C & D Plan Crosswalk Files regarding plan renewal, termination, and other status changes from 2014 to 2015. SUBJECTS: Three hundred eighty-nine MA contracts. MEASURES: Primary outcomes are MLRs and gross margins. RESULTS: MLRs averaged 93% in 2014; 11% of contracts reported MLRs of at least 100%. Fifty-six percent reported negative margins, or costs that exceeded revenues. Seventeen percent of plans in contracts in the lowest quartile of gross margins were terminated in 2015, compared to under 5% of plans in the highest-margin contracts. CONCLUSIONS: In 2014, MA contracts reported MLRs greater than the mandatory minimum of 85%. Gross margins likely contribute to trends in plan and insurer availability. MLR reports from subsequent years can help explain fluctuations in insurers' participation in MA.

Joint recommendations for a total services account as a factor in simplifying contracts.

The objective of clinical trials is to transfer findings gained from basic research to patients and to result in innovative treatment approaches. Along with basic research, results from clinical trials thus represent a core area of medical advances. As a location for clinical trials, Germany is currently well-positioned and internationally competitive. This is evident in its position as No. 2 in Europe and No. 3 worldwide - behind the US and UK - in clinical trials of pharmaceuticals [1]. Maintaining and further improving this favorable positioning as a location for clinical trials is in the mutual interest of all parties involved in the field of clinical research, patients, trial sites and sponsors of clinical trials. For patients, clinical trials offer opportunities to gain early access to innovative therapy options. In addition to the scientific interest from medical faculties, clinical research is thereby an important aspect for university clinics in Germany as they fulfill their medical care mandate. Their involvement in clinical trials gives physicians the ability to gather experience with new treatment approaches at an early stage and to pass this know-how on to their patients. A location's clinical research is thus an important competitive factor in terms of international comparison as well. Industry likewise benefits from the favorable research infrastructure in Germany, which provides rapid patient recruitment and outstanding quality of results obtained and can thus contribute to the early approval of new drugs. From the perspective of the authors, it is therefore essential that Germany continues to remain competitive as a location for conducting clinical trials, precisely because the number of clinical trials is decreasing overall. Companies themselves are in international competition internally and externally, which often creates a certain pressure on trial preparation and thus on the start of a clinical trial. To ensure that a clinical trial can begin early, it is essential that contracts related to the trial are concluded quickly and simply, including remuneration for participants and full, transparent and comprehensible coverage of content for the business relationship. The swift agreement of key contractual and budgetary aspects is therefore in the interest of everyone involved. Against this backdrop, the German Association of Medical Faculties (MFT), the German Association of Academic Medical Centers (VUD), the Coordination Center for Clinical Studies (KKS-Netzwerk) and the German Association of Research-Based Pharmaceutical Companies (vfa) have held joint discussions regarding an important aspect of the contract negotiations - the cost consideration of clinical trials. As a result of these talks, these organizations have developed and published joint "Recommendations for the preparation of a total services calculation for remuneration related to the conduct of a clinical trial in a trial center" [2], [3]. The parties concerned share the conviction that, against the backdrops described, it would be helpful if the potential contract partners had access to recommendations that offer examples of constantly recurring cost positions in order to more precisely determine remuneration related to the conduct of a clinical trial. This article explains how the "Recommendations for the preparation of a total services calculation for remuneration related to the conduct of a clinical trial in a trial center" [2], [3] were developed and provides an overview of their content.

Influence of out-of-network payment standards on insurer-provider bargaining: California's experience.

OBJECTIVES: To examine the early effects of California's recent policy addressing surprise medical billing (AB-72) on the dynamics among physician, hospital, and insurer stakeholders and to identify the influences of the policy's novel out-of-network (OON) payment standard on provider-payer bargaining. This study can inform current policy formation, given that current federal proposals include a payment standard like that in AB-72. STUDY DESIGN: Case study of the implementation of AB-72 and stakeholders' perspectives, experiences, and responses in the first 6 to 12 months after policy implementation. METHODS: Semistructured interviews were conducted with 28 individuals representing policy experts, representatives of advocacy organizations and state-level professional associations, and current executives of physician practice groups, hospitals, and health benefits companies. Related documentation was collected and analyzed, including bill text, rulemaking guidance, testimony before the California Senate Committee on Health, and advocacy letters. Qualitative analysis techniques, such as process tracing and explanation building, were employed to identify key themes. RESULTS: AB-72 is effectively protecting patients from surprise medical bills. However, stakeholders report that an OON payment standard set at payer-specific local average commercial negotiated rates has changed the negotiation dynamics between hospital-based physicians and payers. Interviewees report that leverage has shifted in favor of payers, and payers have an incentive to lower or cancel contracts with rates higher than their average as a means of suppressing OON prices. Physicians reported that this experience of decreased leverage is exacerbating provider consolidation. CONCLUSIONS: California's experience demonstrates that OON payment standards can influence the payer-provider bargaining landscape, affecting network breadth and negotiated rates.

Finding the 'sweet spot' in value-based contracts.

Health systems pursing value-based contracts should address six important considerations: The definition of value. Contracting goals. Cost of implementation. Risk exposure. Contract structure and design. Essential contractual protections.

How can clients improve the quality of transport infrastructure projects? The role of knowledge management and incentives.

The aim of this paper is to argue for a number of statements about what is important for a client to do in order to improve quality in new infrastructure projects, with a focus on procurement and organizational issues. The paper synthesizes theoretical and empirical results concerning organizational performance, especially the role of the client for the quality of a project. The theoretical framework used is contract theory and transaction cost theory, where assumptions about rationality and self-interest are made and where incentive problems, asymmetric information, and moral hazard are central concepts. It is argued that choice of procurement type will not be a crucial factor. There is no procurement method that guarantees a better quality than another. We argue that given the right conditions all procurement methods can give good results, and given the wrong conditions, all of them can lead to low quality. What is crucial is how the client organization manages knowledge and the incentives for the members of the organization. This can be summarized as "organizational culture." One way to improve knowledge and create incentives is to use independent second opinions in a systematic way.

Reduction of construction wastes by improving construction contract management: a multinational evaluation.

The Canadian construction industry generates 30% of the total municipal solid waste deposited in landfills. Ample evidence can be found in the published literature about rework and waste generation due to ambiguity and errors in contract documents. Also, the literature quotes that disclaimer clauses in contract documents are included in the contractual agreements to prevent contractor claims, which often cause rework. Our professional practice has also noted that there are several disclaimer clauses in standard contract documents which have the potential to cause rework (and associated waste). This article illustrates a comparative study of standard contractual documents and their potential to create rework (and associated waste) in different regions of the world. The objectives of this study are (1) to analyse standard contractual documents in Canada, the USA and Australia in terms of their potential to generate rework and waste, and (2) to propose changes/amendments to the existing standard contract documents to minimise/avoid rework. In terms of construction waste management, all the reviewed standard contract documents have deficiencies. The parties that produce the contract documents include exculpatory clauses to avoid the other party's claims. This approach tends to result in rework and construction waste. The contractual agreements/contract documents should be free from errors, deficiencies, ambiguity and unfair risk transfers to minimise/avoid potential to generate rework and waste.

Essential contractual language for medical necessity in children.

The previous policy statement from the American Academy of Pediatrics, "Model Language for Medical Necessity in Children," was published in July 2005. Since that time, there have been new and emerging delivery and payment models. The relationship established between health care providers and health plans should promote arrangements that are beneficial to all who are affected by these contractual arrangements. Pediatricians play an important role in ensuring that the needs of children are addressed in these emerging systems. It is important to recognize that health care plans designed for adults may not meet the needs of children. Language in health care contracts should reflect the health care needs of children and families. Informed pediatricians can make a difference in the care of children and influence the role of primary care physicians in the new paradigms. This policy highlights many of the important elements pediatricians should assess as providers develop a role in emerging care models.

International best practices for negotiating 'reimbursement contracts' with price rebates from pharmaceutical companies.

Reimbursement contracts, in which health insurers receive rebates from drug manufacturers instead of paying the transparent list price, are becoming increasingly common worldwide. Through interviews with policy makers in nine high-income countries, we describe the use of these contracts around the globe and identify related policy challenges and best practices. Of the nine countries surveyed, the majority routinely use confidential reimbursement contracts. This alternative to drug coverage at list prices offers benefits but is not without challenges. Payers face increased administrative costs, difficulties enforcing contracts, and reduced information about prices paid by others. Among the best practices identified, policy makers recommend establishing clear and consistent processes for negotiating contracts with relatively simple rebate structures and transparency to the public about the existence, purpose, and type of reimbursement contracts in place. Policy makers should also work to address undesirable price disparities within their countries and internationally, which may occur as a result of this new pricing paradigm.

[Patient safety in management contracts]. / La seguridad del paciente en los contratos de gestión.

Patient safety is becoming commonplace in management contracts. Since our experience in patient safety still falls short of other clinical areas, it is advisable to review some of its characteristics in order to improve its inclusion in these contracts. In this paper opinions and recommendations concerning the design and review of contractual clauses on safety are given, as well as reflections drawn from methodological papers and informal opinions of clinicians, who are most familiar with the nuances of safe and unsafe practices. After reviewing some features of these contracts, criteria for prioritizing and including safety objectives and activities in them, and key points for their evaluation are described. The need to replace isolated activities by systemic and multifaceted ones is emphasized. Errors, limitations and improvement opportunities observed when contracts are linked to indicators, information and adverse event reporting systems are analysed. Finally, the influence of the rules of the game, and clinicians behaviour are emphasised.