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The effects of upcoding, cream skimming and readmissions on the Italian hospitals efficiency: a population–based investigation

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Author Info
Berta, P
Callea, G
Martini, G
Vittadini, G

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Abstract

In this paper we analyze the effects of some distortions induced by prospective payment system, i.e. Upcoding, Cream Skimming and Readmissions, on hospitals’ technical efficiency. We estimate a production function using a population–based dataset composed by all active hospitals in an Italian region during the period 1998–2007. We show that cream skimming and upcoding have a negative impact on hospitals’ technical efficiency, while readmissions have a positive effect. Moreover, we find that private hospitals are more engaged in cream skimming than public and not–for–profit ones, while we observe no ownership differences regarding upcoding. Not–for–profit hospitals have the highest readmission index. Last, not–for–profit and public hospitals have the same efficiency levels, while private hospitals have the lowest technical efficiency.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 17671.

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Date of creation: 21 Jun 2009
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Handle: RePEc:pra:mprapa:17671

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Related research
Keywords: Upcoding; Cream Skimming; Readmission; Hospital Technical Efficiency; Ownership.;

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Find related papers by JEL classification:
I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Boundaries of Public and Private Enterprise; Privatization; Contracting Out

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  1. Silverman, Elaine & Skinner, Jonathan, 2004. "Medicare upcoding and hospital ownership," Journal of Health Economics, Elsevier, vol. 23(2), pages 369-389, March. [Downloadable!] (restricted)
  2. Zuckerman, Stephen & Hadley, Jack & Iezzoni, Lisa, 1994. "Measuring hospital efficiency with frontier cost functions," Journal of Health Economics, Elsevier, vol. 13(3), pages 255-280, October. [Downloadable!] (restricted)
  3. Sloan, Frank A., 2000. "Not-for-profit ownership and hospital behavior," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 21, pages 1141-1174 Elsevier. [Downloadable!] (restricted)
  4. Barros, Pedro Pita, 2003. "Cream-skimming, incentives for efficiency and payment system," Journal of Health Economics, Elsevier, vol. 22(3), pages 419-443, May. [Downloadable!] (restricted)
  5. Christensen, Laurits R & Jorgenson, Dale W & Lau, Lawrence J, 1973. "Transcendental Logarithmic Production Frontiers," The Review of Economics and Statistics, MIT Press, vol. 55(1), pages 28-45, February. [Downloadable!] (restricted)
  6. Kosuke Imai & Gary King & Elizabeth A. Stuart, 2008. "Misunderstandings between experimentalists and observationalists about causal inference," Journal Of The Royal Statistical Society Series A, Royal Statistical Society, vol. 171(2), pages 481-502. [Downloadable!] (restricted)
  7. Pitt, Mark M. & Lee, Lung-Fei, 1981. "The measurement and sources of technical inefficiency in the Indonesian weaving industry," Journal of Development Economics, Elsevier, vol. 9(1), pages 43-64, August. [Downloadable!] (restricted)
  8. Krishnan, Ranjani, 2001. "Market restructuring and pricing in the hospital industry," Journal of Health Economics, Elsevier, vol. 20(2), pages 213-237, March. [Downloadable!] (restricted)
  9. Cutler, David M, 1995. "The Incidence of Adverse Medical Outcomes under Prospective Payment," Econometrica, Econometric Society, vol. 63(1), pages 29-50, January. [Downloadable!] (restricted)
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  10. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July. [Downloadable!] (restricted)
  11. Leemore S. Dafny, 2005. "How Do Hospitals Respond to Price Changes?," American Economic Review, American Economic Association, vol. 95(5), pages 1525-1547, December. [Downloadable!]
  12. 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. [Downloadable!] (restricted)
  13. Jaume Puig-Junoy, 1998. "Technical efficiency in the clinical management of critically ill patients," Health Economics, John Wiley & Sons, Ltd., vol. 7(3), pages 263-277.
  14. Donald F. Vitaliano & Mark Toren, 1996. "Hospital Cost and Efficiency in a Regime of Stringent Regulation," Eastern Economic Journal, Eastern Economic Association, vol. 22(2), pages 161-175, Spring. [Downloadable!]
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