How to Regulate Heterogeneous Hospistals
AbstractWays to regulate French public hospitals? The purpose of this paper is to study hospital costs in the event of introduction of a Prospective Payment System in France. We use a nested three dimensional database (stays-hospitals-years) in order to identify hospital unobservable heterogeneity and a transitory moral hazard component of cost variability. Econometric estimate are performed on a sample of 7,314 stays for acute myocardial infarction observed in 36 French public hospitals over the period 1994 to 1997. Transitory moral hazard is far from negligible : its estimated standard error is about 50 % of the standard error we estimate for cost variability due to permanent unobervable heterogeneity between hospitals. Simulations show that a cost reduction of about 16 % can be expected from implmentation of a payment system which allows for permanent unobserved heterogeneity and eliminates only transitory moral hazard.
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Bibliographic InfoPaper provided by THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise in its series THEMA Working Papers with number 2003-11.
Date of creation: 2003
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Other versions of this item:
- Brigitte Dormont & Carine Milcent, 2003. "How to regulate heterogenous hospitals?," DELTA Working Papers 2003-19, DELTA (Ecole normale supérieure).
- Dormont, Brigitte & Milcent, Carine, 2005. "How to regulate heterogeneous hospitals ?," Economics Papers from University Paris Dauphine 123456789/5425, Paris Dauphine University.
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
- H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
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