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System-wide impacts of hospital payment reforms: Evidence from Central and Eastern Europe and Central Asia

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  • Moreno-Serra, Rodrigo
  • Wagstaff, Adam

Abstract

While there is broad agreement that the way that health care providers are paid affects their performance, the empirical literature on the impacts of provider payment reforms is surprisingly thin. During the 1990s and early 2000s, many European and Central Asian (ECA) countries shifted from paying hospitals through historical budgets to fee-for-service (FFS) or patient-based payment (PBP) methods (mostly variants of diagnosis-related groups, or DRGs). Using panel data on 28 countries over the period 1990-2004, we exploit the phased shift from historical budgets to explore aggregate impacts on hospital throughput, national health spending, and mortality from causes amenable to medical care. We use a regression version of difference-in-differences (DID) and two variants that relax the DID parallel trends assumption. We find that FFS and PBP both increased national health spending, including private (i.e. out-of-pocket) spending. However, they had different effects on inpatient admissions (FFS increased them; PBP had no effect), and average length of stay (FFS had no effect; PBP reduced it). Of the two methods, only PBP appears to have had any beneficial effect on "amenable mortality", but we found significant impacts for only a couple of causes of death, and not in all model specifications.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Health Economics.

Volume (Year): 29 (2010)
Issue (Month): 4 (July)
Pages: 585-602

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Handle: RePEc:eee:jhecon:v:29:y:2010:i:4:p:585-602

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Web page: http://www.elsevier.com/locate/inca/505560

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Keywords: Provider payment methods Hospital reimbursement Health sector reform;

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Cited by:
  1. Cheng, Shou-Hsia & Chen, Chi-Chen & Tsai, Shu-Ling, 2012. "The impacts of DRG-based payments on health care provider behaviors under a universal coverage system: A population-based study," Health Policy, Elsevier, vol. 107(2), pages 202-208.
  2. Aoife Brick & Anne Nolan & Jacqueline O’Reilly & Samantha Smith, 2012. "Conflicting Financial Incentives in the Irish Health-Care System," The Economic and Social Review, Economic and Social Studies, vol. 43(2), pages 273–301.
  3. Hamada, Hironori & Sekimoto, Miho & Imanaka, Yuichi, 2012. "Effects of the per diem prospective payment system with DRG-like grouping system (DPC/PDPS) on resource usage and healthcare quality in Japan," Health Policy, Elsevier, vol. 107(2), pages 194-201.
  4. P. Choné & F. Evain & L. Wilner & E. Yilmaz, 2013. "Introducing activity-based payment in the hospital industry: Evidence from French data," Documents de Travail de la DESE - Working Papers of the DESE g2013-11, Institut National de la Statistique et des Etudes Economiques, DESE.
  5. Owen Smith & Son Nam Nguyen, 2013. "Getting Better : Improving Health System Outcomes in Europe and Central Asia," World Bank Publications, The World Bank, number 13832, March.
  6. Philippe Choné & Franck Evain & Lionel Wilner & Engin Yilmaz, 2013. "Introducing Activity-Based Payment in the Hospital Industry: Evidence from French Data," CESifo Working Paper Series 4304, CESifo Group Munich.
  7. Bogut, Martina & Voncina, Luka & Yeh, Ethan, 2012. "Impact of hospital provider payment reforms in Croatia," Policy Research Working Paper Series 5992, The World Bank.
  8. Nguyen, Ha Thi Hong & Bales, Sarah & Wagstaff, Adam & Dao, Huyen, 2013. "Getting incentives right: an impact evaluation of district hospital capitation payment in Vietnam," Policy Research Working Paper Series 6709, The World Bank.

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