Paying for Performance in Hospitals
AbstractA frequent form of pay-for-performance programs increase reimbursement for all services by a certain percentage of the baseline price. We examine how such a ?bonus-for-quality? reimbursement scheme a¤ects the wage contract given to physicians by the hospital management. To this end, we determine the bonus inducing hospitals to incentivize their physicians to meet the quality standard. Additionally, we show that the health care payer has to complement the bonus with a (sometimes negative) block grant. We conclude the paper relating the role of the block grant to recent experiences in health care market.
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Bibliographic InfoArticle provided by Queensland University of Technology (QUT), School of Economics and Finance in its journal Economic Analysis and Policy (EAP).
Volume (Year): 41 (2011)
Issue (Month): 1 (March)
Paying-for-Performance; Quality; Hospital Financing;
Other versions of this item:
- Hehenkamp, Burkhard & Kaarbøe, Oddvar, 2008. "Paying for Performance in Hospitals," Working Papers in Economics 01/08, University of Bergen, Department of Economics.
- Hehenkamp, Burkhard & Kaarbøe, Oddvar, 2008. "Paying for Performance in Hospitals," Working Papers in Economics 01/ 8, University of Bergen, Department of Economics.
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
- J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
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