Bargaining Between Community Pharmacies and Third-Party Payors: Influences on Bargaining Outcomes

Abstract

OBJECTIVES: To address the gaps in knowledge of pharmacies' evaluation of third-party contracts and the bargaining process between community pharmacies and third parties by: (1) assessing what activities pharmacies regularly perform in evaluating and signing a third-party contract; (2) determining which bargaining activities are occurring between pharmacies and third-party payors; and (3) evaluating the associations among the characteristics of the bargaining parties, the bargaining process, and bargaining outcomes with community pharmacies and third-party payors. DESIGN: Mail survey. PARTICIPANTS: A random sample of 900 independent and small-chain pharmacies. RESULTS: Ofthe 863 delivered surveys, 308 (35.7%) were returned and analyzed. Respondents did not report a high level of formal contract evaluation. They reported, on average, that they rarely requested a change in a contract. This was consistent with the finding that third parties usually refuse to negotiate changes in a contract. The respondents reported that sometimes they did not sign a contract because of unacceptable terms. Multiple regres~ sions for two bargaining outcomesequity of contractual terms and satisfaction with a third party payor-were significant. The same bargainer and bargaining process variables were used as the independent variables in the regressions. For equity of contractual terms (R Square=0.442), significant associations were found for contending, problem solving, and dependence symmetry. For satisfaction with a third-party payor (R Square=OA29), significant associations were found for collaborative communication, contending, and dependence symmetry. CONCLUSIONS: Pharmacies should develop strategies to improve communication with third parties. The symmetry of dependence between a pharmacy and a third-party payor is a key influence on bargaining outcomes. The strategies employed during bargaining, such as contending or problem solving, also affect bargaining outcomes.