Sticky costs and regulation in private healthcare providers

Abstract

This study aims to analyze the effects of the Brazilian National Supplementary Health Agency’s (NSHA) regulation on sticky costs of private healthcare providers (PHP). The research used financial and operational data from the NSHA analyzed through panel data regression and focused on PHP classified as medical cooperatives and group medicine between 2010 and 2018. The models developed employed different cost proxies (dependent variable) and explanatory variables. We verified that two cost proxies presented significant relations in all models: selling, general, and administrative expenses, and total cost. Concerning regulation variables, one was significant in the two studied modalities: PHP dependency ratio. This paper presents many contributions to different PHP’ stakeholders, such as NSHA, their managers, and Brazilian society. Among the main findings are (a) the importance of analyzing the organizations’ legal nature when examining sticky costs; (b) the proposal of different regulation variables to understand this phenomenon while displaying its importance in regulated industries; and (c) the relevance of employing different proxies when measuring sticky cost.