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Creaming and Dumping: Who on Whom?

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  • Socha-Dietrich, Karolina

    ()
    (COHERE, Department of Business and Economics)

  • Zweifel, Peter

    ()
    (Department of Economics)

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    Abstract

    In several countries, public healthcare providers purchase services from private providers to shorten waiting times. Some private providers in turn combine public service with practice in their own facilities. According to the existing literature, they are viewed as cream-skimming profitable (low-severity) public patients to the benefit of private practice, causing cost of treatment in the public sector to increase. This is particularly problematic when public provider payment is prospective. However, two facts seem to be neglected. First, cream skimming involves effort and thus does not occur in all circumstances. Second, public providers might have an incentive to select patients too, resulting in dumping of the least profitable (high-severity) patients on the private sector. This paper derives the conditions under which both creaming and dumping are predicted to occur.

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    File URL: http://static.sdu.dk/mediafiles//1/2/B/%7B12BD95AB-F23C-4CDC-BAD3-0A3FBCE63EE4%7D20144ny.pdf
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    Bibliographic Info

    Paper provided by COHERE - Centre of Health Economics Research, University of Southern Denmark in its series COHERE Working Paper with number 2014:4.

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    Length: 21 pages
    Date of creation: 01 Mar 2014
    Date of revision:
    Handle: RePEc:hhs:sduhec:2014_004

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    Postal: COHERE - Center for Sundhedsøkonomisk Forskning, Institut for Virksomhedsledelse og Økonomi, Syddansk Universitet, Campusvej 55, DK-5230 Odense M, Denmark
    Phone: (+45) 6550 3081
    Fax: (+45) 6550 3880
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    Web page: http://www.sdu.dk/Om_SDU/Institutter_centre/cCohere
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    Related research

    Keywords: Creaming; Dumping; Waiting lists; Public Service; Dual Practice;

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    References

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    1. Ching-to Albert Ma & Thomas G. McGuire, 1995. "Optimal Health Insurance and Provider Payment," Papers, Boston University - Industry Studies Programme 0059, Boston University - Industry Studies Programme.
    2. Pita Barros, Pedro Luis, 2000. "Waiting Lists and Patient Selection," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2519, C.E.P.R. Discussion Papers.
    3. Rickman, Neil & McGuire, Alistair, 1999. "Regulating Providers' Reimbursement in a Mixed Market for Health Care," Scottish Journal of Political Economy, Scottish Economic Society, Scottish Economic Society, vol. 46(1), pages 53-71, February.
    4. Ching-to Albert Ma, 1994. "Health Care Payment Systems: Cost and Quality Incentives," Papers, Boston University - Industry Studies Programme 0047, Boston University - Industry Studies Programme.
    5. Ellis, Randall P. & McGuire, Thomas G., 1986. "Provider behavior under prospective reimbursement : Cost sharing and supply," Journal of Health Economics, Elsevier, Elsevier, vol. 5(2), pages 129-151, June.
    6. Newhouse, Joseph P. & Byrne, Daniel J., 1988. "Did Medicare's Prospective Payment System cause length of stay to fall?," Journal of Health Economics, Elsevier, Elsevier, vol. 7(4), pages 413-416, December.
    7. Shishko, Robert & Rostker, Bernard, 1976. "The Economics of Multiple Job Holding," American Economic Review, American Economic Association, American Economic Association, vol. 66(3), pages 298-308, June.
    8. Le Grand, Julian, 1991. "Quasi-markets and Social Policy," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 101(408), pages 1256-67, September.
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