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The Short-Term Response of Hospitals to the Introduction of the DRG Based Prospective Payment System: Some Evidence from Italy


  • Maria Daniela Giammanco

    () (University of Catania, Facoltà di Scienze Politiche, Istituto di Scienze)


The aim of this paper is to analyse hospitals’ response to the Diagnosis Related Groups-based prospective payment system in its first year of implementation in Italy. It investigates the short-term variations of the average length of stay, the case flow, the occupancy rate, and the rate of readmission. Results show that hospitals have responded to the new prospective payment system by significantly reducing the average length of stay. This reduction, however, has not been matched by a greater number of inpatient hospital episodes, leading to a decreasing occupancy ratio pattern.

Suggested Citation

  • Maria Daniela Giammanco, 1999. "The Short-Term Response of Hospitals to the Introduction of the DRG Based Prospective Payment System: Some Evidence from Italy," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 58(1), pages 27-62, April.
  • Handle: RePEc:gde:journl:gde_v58_n1_p27-62

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    Cited by:

    1. Stefan Meyer, 2015. "Payment schemes and cost efficiency: evidence from Swiss public hospitals," International Journal of Health Economics and Management, Springer, vol. 15(1), pages 73-97, March.

    More about this item


    health care; prospective payment system; average length of stay;

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health


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