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Heterogeneous hospital response to a per diem prospective payment system

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  • Galina Besstremyannaya

    ()
    (CEFIR)

Abstract

The paper provides the empirical support for heterogeneity in hospital response to changeover from the fee-for-service (FFS) system to a per diem prospective payment system (PPS). Using a recent administrative database for the universe of Japanese hospitals, I conduct estimations with dynamic panel data and show that hospitals with shorter (longer) average length of stay under FFS have longer (shorter) average length of stay under per diem PPS. The planned readmission rate increases under per diem PPS for FFS hospitals with longer average length of stay.

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Bibliographic Info

Paper provided by Center for Economic and Financial Research (CEFIR) in its series Working Papers with number w0193.

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Length: 24 pages
Date of creation: May 2013
Date of revision:
Handle: RePEc:cfr:cefirw:w0193

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  1. Ellis, Randall P. & McGuire, Thomas G., 1996. "Hospital response to prospective payment: Moral hazard, selection, and practice-style effects," Journal of Health Economics, Elsevier, vol. 15(3), pages 257-277, June.
  2. Chalkley, M. & Malcomson, J.M., 1998. "Government purchasing of health services," Discussion Paper Series In Economics And Econometrics 9821, Economics Division, School of Social Sciences, University of Southampton.
  3. Mark McClellan, 1997. "Hospital Reimbursement Incentives: An Empirical Analysis," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 6(1), pages 91-128, 03.
  4. Ellis, Randall P. & McGuire, Thomas G., 1986. "Provider behavior under prospective reimbursement : Cost sharing and supply," Journal of Health Economics, Elsevier, vol. 5(2), pages 129-151, June.
  5. Pope, Gregory C., 1989. "Hospital nonprice competition and medicare reimbursement policy," Journal of Health Economics, Elsevier, vol. 8(2), pages 147-172, June.
  6. Grabowski, David C. & Afendulis, Christopher C. & McGuire, Thomas G., 2011. "Medicare prospective payment and the volume and intensity of skilled nursing facility services," Journal of Health Economics, Elsevier, vol. 30(4), pages 675-684, July.
  7. Fujii, Mitsuru & Reich, Michael R., 1988. "Rising medical costs and the reform of Japan's health insurance system," Health Policy, Elsevier, vol. 9(1), pages 9-24.
  8. Kondo, Akiko & Kawabuchi, Koichi, 2012. "Evaluation of the introduction of a diagnosis procedure combination system for patient outcome and hospitalisation charges for patients with hip fracture or lung cancer in Japan," Health Policy, Elsevier, vol. 107(2), pages 184-193.
  9. Jegers, Marc & Kesteloot, Katrien & De Graeve, Diana & Gilles, Willem, 2002. "A typology for provider payment systems in health care," Health Policy, Elsevier, vol. 60(3), pages 255-273, June.
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