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Is the quality of hospital care price sensitive? Regression kink estimates from a volume dependent price setting scheme

Author

Listed:
  • Kristensen, Søren Rud

    (Centre of Health Economics, University of Manchester)

  • Fe, Eduardo

    (Health Economics Research Unit, University of Oxford)

  • Bech, Mickael

    (COHERE, Department of Business and Economics, University of Southern Denmark)

  • Mainz, Jan

    (COHERE, Institute of Public Health, University of Southern Denmark)

Abstract

This paper estimates the price sensitivity of the quality of acute stroke care using a regression kink design. When Danish hospitals reach a production target, marginal tari s for treating acute stroke patients falls by 50%{100%. This reimbursement scheme allow us to identify local average treatment ef- fects of reimbursement tari s on the quality of hospital care. A rich data set of the process quality of stroke care allows us to detect minor changes in the quality of care that are important for the long term outcomes but do not lead to dead or readmission captured by commonly employed outcome indicators. Hospitals that were exposed to reductions in the marginal tari of less than 100% did not appear to respond in quality to reductions in tari s. Hospital for which the marginal tari for acute stroke patients dropped to 0 responded to tari reductions by slightly decreasing the level of quality for acute stroke care patients. The estimated size of the e ect is minor but robust to various tests of sensitivity, indicating that the estimated e ect is not spurious.

Suggested Citation

  • Kristensen, Søren Rud & Fe, Eduardo & Bech, Mickael & Mainz, Jan, 2013. "Is the quality of hospital care price sensitive? Regression kink estimates from a volume dependent price setting scheme," DaCHE discussion papers 2013:4, University of Southern Denmark, Dache - Danish Centre for Health Economics.
    • Handle: RePEc:hhs:sduhec:2013_004
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    Citations

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    Cited by:

    1. Ganong, Peter & Jäger, Simon, 2014. "A Permutation Test and Estimation Alternatives for the Regression Kink Design," IZA Discussion Papers 8282, Institute of Labor Economics (IZA).
    2. Jaeger, Simon C & Ganong, Peter Nathan, 2014. "A Permutation Test and Estimation Alternatives for the Regression Kink Design," Scholarly Articles 34222894, Harvard University Department of Economics.

    More about this item

    Keywords

    Quality of health care; Price regulation; Activity based reimbursement; Supply side incentives;
    All these keywords.

    JEL classification:

    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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