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Upcoding and heterogeneity in hospitals’ response: A Natural Experiment

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  • Carine Milcent

    (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, CEPREMAP - Centre pour la recherche économique et ses applications - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres)

Abstract

How has this administrative change affcted the healthcare providers behaviour? Using a unique longitudinal database with 145 million stays, I study the dependence of the severity classification associated with hospital stays on a financial incentive, as well as the resulting budgetary reallocations. The classification of diagnosis-related groups (DRGs) in France changed in 2009. The number of groups was multiplied by 4. Controlling for pathology indicators and hospital fixed e↵ects, I unambiguously demonstrate that a finer classification led to an "upcoding" of stays. Because of a fixed annual budget at the national level, these results directly imply that the upcoding led to a budget reallocation which increased the share of health spending that went to for-profit hospitals, at the expense of public nonresearch hospitals. This budget reallocation did not correspond to any change in the actual production of care.

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  • Carine Milcent, 2016. "Upcoding and heterogeneity in hospitals’ response: A Natural Experiment," Working Papers halshs-01340557, HAL.
  • Handle: RePEc:hal:wpaper:halshs-01340557
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01340557
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    Keywords

    Hospital stays; Diagnosis-related groups (DRGs); Upcoding; heterogeneity in responses;
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