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System-wide impacts of hospital payment reforms : evidence from central and eastern Europe and central Asia

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  • Moreno-Serra, Rodrigo
  • Wagstaff, Adam

Abstract

Although there is broad agreement that the way that health care providers are paid affects their performance, the empirical literature on the impacts of provider payment reforms is surprisingly thin. During the 1990s and early 2000s, many European and Central Asian countries shifted from paying hospitals through historical budgets to fee-for-service or patient-based-payment methods (mostly variants of diagnosis-related groups). Using panel data on 28 countries over the period 1990-2004, the authors of this study exploit the phased shift from historical budgets to explore aggregate impacts on hospital throughput, national health spending, and mortality from causes amenable to medical care. They use a regression version of difference-in-differences and two variants that relax the difference-in-differences parallel trends assumption. The results show that fee-for-service and patient-based-payment methods both increased national health spending, including private (out-of-pocket) spending. However, they had different effects on inpatient admissions (fee-for-service increased them; patient-based-payment had no effect), and average length of stay (fee-for-service had no effect; patient-based-payment reduced it). Of the two methods, only patient-based-payment appears to have had any beneficial effect on"amenable mortality,"but there were significant impacts for only a couple of causes of death, and not in all model specifications.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4987.

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Date of creation: 01 Jul 2009
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Handle: RePEc:wbk:wbrwps:4987

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Keywords: Health Monitoring&Evaluation; Health Systems Development&Reform; Health Economics&Finance; Health Law; Population Policies;

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Cited by:
  1. Cheng, Shou-Hsia & Chen, Chi-Chen & Tsai, Shu-Ling, 2012. "The impacts of DRG-based payments on health care provider behaviors under a universal coverage system: A population-based study," Health Policy, Elsevier, Elsevier, vol. 107(2), pages 202-208.
  2. P. Choné & F. Evain & L. Wilner & E. Yilmaz, 2013. "Introducing activity-based payment in the hospital industry: Evidence from French data," Documents de Travail de la DESE - Working Papers of the DESE, Institut National de la Statistique et des Etudes Economiques, DESE g2013-11, Institut National de la Statistique et des Etudes Economiques, DESE.
  3. Guccio, Calogero & Lisi, Domenico & Pignataro, Giacomo, 2014. "Readmission and Hospital Quality under Prospective Payment System," MPRA Paper 56490, University Library of Munich, Germany.
  4. Owen Smith & Son Nam Nguyen, 2013. "Getting Better : Improving Health System Outcomes in Europe and Central Asia," World Bank Publications, The World Bank, number 13832, August.
  5. Nguyen, Ha Thi Hong & Bales, Sarah & Wagstaff, Adam & Dao, Huyen, 2013. "Getting incentives right : an impact evaluation of district hospital capitation payment in Vietnam," Policy Research Working Paper Series 6709, The World Bank.
  6. Bogut, Martina & Voncina, Luka & Yeh, Ethan, 2012. "Impact of hospital provider payment reforms in Croatia," Policy Research Working Paper Series 5992, The World Bank.
  7. Hamada, Hironori & Sekimoto, Miho & Imanaka, Yuichi, 2012. "Effects of the per diem prospective payment system with DRG-like grouping system (DPC/PDPS) on resource usage and healthcare quality in Japan," Health Policy, Elsevier, Elsevier, vol. 107(2), pages 194-201.
  8. Gao, Chen & Xu, Fei & Liu, Gordon G., 2014. "Payment reform and changes in health care in China," Social Science & Medicine, Elsevier, Elsevier, vol. 111(C), pages 10-16.
  9. Aoife Brick & Anne Nolan & Jacqueline O’Reilly & Samantha Smith, 2012. "Conflicting Financial Incentives in the Irish Health-Care System," The Economic and Social Review, Economic and Social Studies, Economic and Social Studies, vol. 43(2), pages 273–301.
  10. Cheng, Amy H.Y. & Sutherland, Jason M., 2013. "British Columbia's pay-for-performance experiment: Part of the solution to reduce emergency department crowding?," Health Policy, Elsevier, Elsevier, vol. 113(1), pages 86-92.

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