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The impact of upcoding, cream skimming and readmissions on hospitals’ efficiency: the case of Lombardy


  • Paolo Berta
  • Giuditta Callea


  • Gianmaria Martini
  • Giorgio Vittadini


This paper investigates the efficiency of Italian hospitals during the period 1998–2007 and consider the impact of some DRG distortions like uocoding, cream skimming and readmission. We apply both a stochastic frontier approach and a multilevel model. We show that readmissions are the most relevant distortion. Moreover, cream skimming has a negative impact for public and private hospitals and upcoding has a clear positive but little impact only for public hospitals. These results imply that the reaction of the different hospital types to the public policy aimed to reduced the DRG distortions is different. Private hospitals tend to reduce the DRGs while the public hospitals increase the readmissions. Last, private hospitals are less efficient than public and not–for–profit ones, once we take the DRG distortions (and other covariates) into account, both for the SF approach and the ML model.

Suggested Citation

  • Paolo Berta & Giuditta Callea & Gianmaria Martini & Giorgio Vittadini, 2008. "The impact of upcoding, cream skimming and readmissions on hospitals’ efficiency: the case of Lombardy," Working Papers 0806, Department of Economics and Technology Management, University of Bergamo.
  • Handle: RePEc:brh:wpaper:0806

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    DRG distortions; hospital efficiency; ownership forms; stochastic frontier; multi level.;

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out


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