How to Regulate Heterogeneous Hospistals
Ways to regulate French public hospitals? The purpose of this paper is to study hospital costs in the event of introduction of a Prospective Payment System in France. We use a nested three dimensional database (stays-hospitals-years) in order to identify hospital unobservable heterogeneity and a transitory moral hazard component of cost variability. Econometric estimate are performed on a sample of 7,314 stays for acute myocardial infarction observed in 36 French public hospitals over the period 1994 to 1997. Transitory moral hazard is far from negligible : its estimated standard error is about 50 % of the standard error we estimate for cost variability due to permanent unobervable heterogeneity between hospitals. Simulations show that a cost reduction of about 16 % can be expected from implmentation of a payment system which allows for permanent unobserved heterogeneity and eliminates only transitory moral hazard.
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| Date of creation: | 2003 |
| Handle: | RePEc:ema:worpap:2003-11 |
| Contact details of provider: | Postal: 33, boulevard du port - 95011 Cergy-Pontoise Cedex Phone: 33 1 34 25 60 63 Fax: 33 1 34 25 62 33 Web page: http://thema.u-cergy.fr Email: More information through EDIRC
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- Joseph P. Newhouse, 1996. "Reimbursing Health Plans and Health Providers: Efficiency in Production versus Selection," Journal of Economic Literature, American Economic Association, vol. 34(3), pages 1236-1263, September.