Analyzing linked systems of negotiations

This article presents a conceptual framework for analyzing the structure and dynamics of what the authors call linked systems of negotiations. Even such seemingly straightforward transactions as the purchase of a family car tend to involve linked negotiations. The framework highlights the importance of internegotiation processes in shaping Zones of Possible Agreement, and proposes a typology of linkage. By mapping out and reengineering linked systems, negotiators can enhance their ability to shape the structure within which their negotiations take place.     

Setting limits through global budgeting: hospital cost containment in Rhode Island

In 1974, hospitals in Rhode Island have participated in annual negotiations with state officials and representatives from Blue Cross to determine the allowed increase in statewide hospital costs (the "Maxicap") for the next fiscal year, based on projected increases in hospitals' revenues, changes in patient volume and operating expenses. Individual hospital budgets may be above or below the Maxicap as long as the total increase in hospital costs for all hospitals in the state does not exceed the negotiated amount. At a time when regulatory solutions are increasingly under fire, continued support for Rhode Island's approach to hospital cost containment from third party payers, providers and public officials stands in stark contrast to other states where rate setting was either dismantled or discredited as a cost control strategy. A negotiated global cap on hospital expenditures offers an alternative to formula-based state rate-setting methodologies which could be incorporated as part of an all-payer reimbursement methodology or as an incremental step towards more comprehensive reform.