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The welfare loss from hospital cost-shifting behavior: a partial equilibrium analysis

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Author Info
Rexford E. Santerre (School of Business, University of Connecticut, USA)

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Abstract

Cost shifting occurs when changes in administered prices of one payer lead to compensating changes in prices charged to other payers. Microeconomic theory suggests that cost shifting can take place under limited conditions and some empirical studies indicate that that hospital cost shifting may have actually occurred at various times. This study designs a model to conceptualize and quantify the potential welfare loss caused by hospital cost shifting under idealized yet fairly plausible conditions. The resulting estimate yields only a small efficiency loss of at most, 0.84% of private hospital expenditures in the US for 1992. Copyright © 2004 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/hec.961
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Publisher Info
Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

Volume (Year): 14 (2005)
Issue (Month): 6 ()
Pages: 621-626
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Handle: RePEc:wly:hlthec:v:14:y:2005:i:6:p:621-626

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Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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References listed on IDEAS
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  1. Manning, Willard G, et al, 1987. "Health Insurance and the Demand for Medical Care: Evidence from a Randomized Experiment," American Economic Review, American Economic Association, vol. 77(3), pages 251-77, June. [Downloadable!] (restricted)
  2. Jack Zwanziger & Glenn A. Melnick & Anil Bamezai, 2000. "Can cost shifting continue in a price competitive environment?," Health Economics, John Wiley & Sons, Ltd., vol. 9(3), pages 211-226.
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This page was last updated on 2009-12-30.

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