Which implication regarding hospital price negotiations in selective contracting is valid?

In the context of selective contracting and hospital price negotiations, the implication that insurers should discourage new entrants into the healthcare market is valid because introducing new competitors can disrupt the balance of negotiated prices and contracts. When new entrants join the market, they can lead to increased competition, which may push prices lower, making it harder for existing providers and insurers to negotiate favorable rates. Insurers, therefore, might prefer to maintain a more stable market with fewer competitors to preserve their cost structures and the efficiency of their negotiations.

The other implications do not align with the dynamics of selective contracting. For example, self-employed pediatricians do not inherently aid selective contracting; rather, a more significant concern would be the collaboration between various healthcare providers in the network. Additionally, idle capacity in a local market generally leads to financial strain for hospitals rather than healthier neighboring facilities, as the competition may cause price reductions that could further destabilize their operations. Thus, focusing on discouraging new market entrants aligns with the strategy for maintaining beneficial pricing agreements in selective contracting.