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Hospital’s activity-based financing system and manager: physician interaction

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  • David Crainich
  • Hervé Leleu
  • Ana Mauleon

Abstract

Hospital financing systems determine ma jor decisions made by physicians and managers within hospitals. This paper examines the impact of the transition toward an activity-based reimburse- ment system that has emerged in most OCDE countries. We consider two initial situations, one for a private for-profit sector where both hospitals and physicians are paid on a fee-for-service basis and the other for a public sector under prospective budget and salaried physicians. For the private sector, our model focuses on the type of interaction (simultaneous, sequential or joint decision-making games) that should emerge between agents after the introduction of the activity-based financing system. In the public sector, the elasticity of the demand to the level of inputs seems to play a more crucial role in the transition.
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Suggested Citation

  • David Crainich & Hervé Leleu & Ana Mauleon, 2011. "Hospital’s activity-based financing system and manager: physician interaction," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 12(5), pages 417-427, October.
    • Handle: RePEc:spr:eujhec:v:12:y:2011:i:5:p:417-427
    DOI: 10.1007/s10198-010-0255-1
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    More about this item

    Keywords

    Hospital’s financing system; Strategic interaction; Activity-based payment system; I1; D4; D2;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • D2 - Microeconomics - - Production and Organizations

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