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Financial Incentives and Inappropriateness in Health Care: Evidence from Italian Cesarean Sections

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  • Marina Cavalieri
  • Calogero Guccio
  • Domenico Lisi
  • Giacomo Pignataro

Abstract

The purpose of this paper is to examine the effect of financial incentives on the level of inappropriateness in health care. The case of the Italian NHS seems to be especially interesting when considering the effects of financial incentives on providers' behaviors, as decentralization processes have progressively increased the variability among Regional Health Authorities in both the financing and the delivery of health care. In particular, we investigate the effect of DRG tariff differentials on hospital risk-adjusted cesarean rates for first-time mothers during the period 2009-2011. Our main finding is that Italian hospitals respond to financial incentives in obstetrics and that the strategic behavioral response varies by hospital type.

Suggested Citation

  • Marina Cavalieri & Calogero Guccio & Domenico Lisi & Giacomo Pignataro, 2014. "Financial Incentives and Inappropriateness in Health Care: Evidence from Italian Cesarean Sections," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 70(3), pages 430-457, September.
    • Handle: RePEc:mhr:finarc:urn:sici:0015-2218(201409)70:3_430:fiaiih_2.0.tx_2-n
    DOI: 10.1628/001522108X684538
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    References listed on IDEAS

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    1. Anthony B. Atkinson & Thomas Piketty & Emmanuel Saez, 2011. "Top Incomes in the Long Run of History," Journal of Economic Literature, American Economic Association, vol. 49(1), pages 3-71, March.
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    Cited by:

    1. Barili, Emilia & Bertoli, Paola & Grembi, Veronica, 2021. "Fee equalization and appropriate health care," Economics & Human Biology, Elsevier, vol. 41(C).
    2. Vidoli, Francesco & Pignataro, Giacomo & Benedetti, Roberto, 2022. "Identification of spatial regimes of the production function of Italian hospitals through spatially constrained cluster-wise regression," Socio-Economic Planning Sciences, Elsevier, vol. 82(PA).
    3. Guccio, C. & Lisi, D., 2014. "Social interactions in inappropriate behavior for childbirth services: Theory and evidence from the Italian hospital sector," Health, Econometrics and Data Group (HEDG) Working Papers 14/28, HEDG, c/o Department of Economics, University of York.
    4. De Luca, Giacomo & Lisi, Domenico & Martorana, Marco & Siciliani, Luigi, 2021. "Does higher Institutional Quality improve the Appropriateness of Healthcare Provision?," Journal of Public Economics, Elsevier, vol. 194(C).
    5. Ahcène Zehnati & Marwân-al-Qays Bousmah & Mohammad Abu-Zaineh, 2021. "Public–private differentials in health care delivery: the case of cesarean deliveries in Algeria," International Journal of Health Economics and Management, Springer, vol. 21(3), pages 367-385, September.
    6. Guccio, Calogero & Lisi, Domenico, 2016. "Thus do all. Social interactions in inappropriate behavior for childbirth services in a highly decentralized healthcare system," Regional Science and Urban Economics, Elsevier, vol. 61(C), pages 1-17.
    7. Castro, Massimo Finocchiaro & Ferrara, Paolo Lorenzo & Guccio, Calogero & Lisi, Domenico, 2019. "Medical malpractice liability and physicians’ behavior: Experimental evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 166(C), pages 646-666.
    8. Berta, P.; & Martini, G.; & Piacenza, M.; & Turati, G.;, 2019. "The strange case of appropriate C-sections:DRG-tariff regulation, hospital ownership, and market concentration," Health, Econometrics and Data Group (HEDG) Working Papers 19/02, HEDG, c/o Department of Economics, University of York.
    9. Bertoli, Paola & Grembi, Veronica, 2019. "Malpractice risk and medical treatment selection," Journal of Public Economics, Elsevier, vol. 174(C), pages 22-35.
    10. Castro, M.F.; & Ferrara, P.; & Guccio, C.; & Lisi, D.;, 2018. "Medical Malpractice Liability and Physicians’ Behavior:Experimental Evidence," Health, Econometrics and Data Group (HEDG) Working Papers 18/11, HEDG, c/o Department of Economics, University of York.
    11. Paolo Berta & Gianmaria Martini & Massimiliano Piacenza & Gilberto Turati, 2020. "The strange case of less C‐sections: Hospital ownership, market concentration, and DRG‐tariff regulation," Health Economics, John Wiley & Sons, Ltd., vol. 29(S1), pages 30-46, October.
    12. Annalisa Scognamiglio, 2019. "Cesarean sections: Use or abuse?," CSEF Working Papers 534, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    13. Finocchiaro Castro, Massimo & Ferrara, Paolo Lorenzo & Guccio, Calogero & Lisi, Domenico, 2021. "Optimal mixed payment system and medical liability. A laboratory study," MPRA Paper 110276, University Library of Munich, Germany.

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    More about this item

    Keywords

    inappropriateness; Cesarean section; financial incentives; DRG differentials;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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