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Introducing Activity-Based Payment in the Hospital Industry: Evidence from French Data

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  • Philippe Choné
  • Franck Evain
  • Lionel Wilner
  • Engin Yilmaz
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    Abstract

    Many countries have reformed hospital reimbursement policies to provide stronger incentives for quality and cost reduction. The purpose of this work is to understand how the effect of such reforms depends on the intensity of local competition. We build a nonprice competition model to examine the effect of a shift from global budget to patient-based payment for public hospitals in France. We predict that the number of patient admissions should increase in public hospitals by more than in private clinics and that the increase in admissions is stronger in public hospitals more exposed to competitive pressure from private clinics. Considering the reform implemented in France between 2005 and 2008, we find empirical evidence supporting these predictions.

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    File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2013/wp-cesifo-2013-06/cesifo1_wp4304.pdf
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    Bibliographic Info

    Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 4304.

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    Date of creation: 2013
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    Handle: RePEc:ces:ceswps:_4304

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    Related research

    Keywords: health care markets; prospective payment system; local competition; not-for-profit hospitals;

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    References

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    1. Pope, Gregory C., 1989. "Hospital nonprice competition and medicare reimbursement policy," Journal of Health Economics, Elsevier, vol. 8(2), pages 147-172, June.
    2. Ma, Ching-to Albert, 1994. "Health Care Payment Systems: Cost and Quality Incentives," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 3(1), pages 93-112, Spring.
    3. Randall P. Ellis & Thomas G. McGuire, 1994. "Hospital Response to Prospective Payment: Moral Hazard, Selection, and Practice-Style Effects," Papers 0050, Boston University - Industry Studies Programme.
    4. Kurt R. Brekke & Luigi Siciliani & Odd Rune Straume, 2011. "Hospital Competition and Quality with Regulated Prices," Scandinavian Journal of Economics, Wiley Blackwell, vol. 113, pages 444-469, 06.
    5. Moreno-Serra, Rodrigo & Wagstaff, Adam, 2009. "System-wide impacts of hospital payment reforms : evidence from central and eastern Europe and central Asia," Policy Research Working Paper Series 4987, The World Bank.
    6. Carol Propper, 2012. "Competition, incentives and the English NHS," Health Economics, John Wiley & Sons, Ltd., vol. 21(1), pages 33-40, 01.
    7. Hodgkin, Dominic & McGuire, Thomas G., 1994. "Payment levels and hospital response to prospective payment," Journal of Health Economics, Elsevier, vol. 13(1), pages 1-29, March.
    8. Leemore S. Dafny, 2005. "How Do Hospitals Respond to Price Changes?," American Economic Review, American Economic Association, vol. 95(5), pages 1525-1547, December.
    9. Lancaster, Tony, 2000. "The incidental parameter problem since 1948," Journal of Econometrics, Elsevier, vol. 95(2), pages 391-413, April.
    10. Ellis, Randall P., 1998. "Creaming, skimping and dumping: provider competition on the intensive and extensive margins1," Journal of Health Economics, Elsevier, vol. 17(5), pages 537-555, October.
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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. #HEJC papers for August 2013
      by academichealtheconomists in The Academic Health Economists' Blog on 2013-07-31 23:00:48

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