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The effects of upcoding, cream skimming and readmissions on the Italian hospitals efficiency: a population–based investigation

  • Berta, P
  • Callea, G
  • Martini, G
  • Vittadini, G

In this paper we analyze the effects of some distortions induced by prospective payment system, i.e. Upcoding, Cream Skimming and Readmissions, on hospitals’ technical efficiency. We estimate a production function using a population–based dataset composed by all active hospitals in an Italian region during the period 1998–2007. We show that cream skimming and upcoding have a negative impact on hospitals’ technical efficiency, while readmissions have a positive effect. Moreover, we find that private hospitals are more engaged in cream skimming than public and not–for–profit ones, while we observe no ownership differences regarding upcoding. Not–for–profit hospitals have the highest readmission index. Last, not–for–profit and public hospitals have the same efficiency levels, while private hospitals have the lowest technical efficiency.

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File URL: http://mpra.ub.uni-muenchen.de/17671/1/MPRA_paper_17671.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 17671.

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Date of creation: 21 Jun 2009
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Handle: RePEc:pra:mprapa:17671
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  1. Gian Paolo Barbetta & Gilberto Turati & Angelo Zago, 2004. "Behavioral Differences Between Public and Private Not-For-Profit Hospitals in the Italian National Health Service," Working Papers 12, University of Verona, Department of Economics.
  2. Ellis, Randall P., 1998. "Creaming, skimping and dumping: provider competition on the intensive and extensive margins1," Journal of Health Economics, Elsevier, vol. 17(5), pages 537-555, October.
  3. Cutler, D.M., 1992. "The Incidence of Adverse Medical Outcome Under Prospective Payment," Harvard Institute of Economic Research Working Papers 1603, Harvard - Institute of Economic Research.
  4. William Greene, 2002. "Fixed and Random Effects in Stochastic Frontier Models," Working Papers 02-16, New York University, Leonard N. Stern School of Business, Department of Economics.
  5. Pitt, Mark M. & Lee, Lung-Fei, 1981. "The measurement and sources of technical inefficiency in the Indonesian weaving industry," Journal of Development Economics, Elsevier, vol. 9(1), pages 43-64, August.
  6. Greene, William, 2005. "Reconsidering heterogeneity in panel data estimators of the stochastic frontier model," Journal of Econometrics, Elsevier, vol. 126(2), pages 269-303, June.
  7. Gian Paolo Barbetta & Gilberto Turati & Angelo M. Zago, 2007. "Behavioral differences between public and private not-for-profit hospitals in the Italian national health service," Health Economics, John Wiley & Sons, Ltd., vol. 16(1), pages 75-96.
  8. Donald F. Vitaliano & Mark Toren, 1996. "Hospital Cost and Efficiency in a Regime of Stringent Regulation," Eastern Economic Journal, Eastern Economic Association, vol. 22(2), pages 161-175, Spring.
  9. Krishnan, Ranjani, 2001. "Market restructuring and pricing in the hospital industry," Journal of Health Economics, Elsevier, vol. 20(2), pages 213-237, March.
  10. Barros, Pedro Pita, 2003. "Cream-skimming, incentives for efficiency and payment system," Journal of Health Economics, Elsevier, vol. 22(3), pages 419-443, May.
  11. George W. Wilson & Joseph M. Jadlow, 1982. "Competition, Profit Incentives, and Technical Efficiency in the Provision of Nuclear Medicine Services," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 472-482, Autumn.
  12. Kosuke Imai & Gary King & Elizabeth A. Stuart, 2008. "Misunderstandings between experimentalists and observationalists about causal inference," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 171(2), pages 481-502.
  13. Christensen, Laurits R & Jorgenson, Dale W & Lau, Lawrence J, 1973. "Transcendental Logarithmic Production Frontiers," The Review of Economics and Statistics, MIT Press, vol. 55(1), pages 28-45, February.
  14. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
  15. Jaume Puig-Junoy, 1998. "Technical efficiency in the clinical management of critically ill patients," Health Economics, John Wiley & Sons, Ltd., vol. 7(3), pages 263-277.
  16. Sloan, Frank A., 2000. "Not-for-profit ownership and hospital behavior," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 21, pages 1141-1174 Elsevier.
  17. Zuckerman, Stephen & Hadley, Jack & Iezzoni, Lisa, 1994. "Measuring hospital efficiency with frontier cost functions," Journal of Health Economics, Elsevier, vol. 13(3), pages 255-280, October.
  18. Leemore S. Dafny, 2005. "How Do Hospitals Respond to Price Changes?," American Economic Review, American Economic Association, vol. 95(5), pages 1525-1547, December.
  19. Silverman, Elaine & Skinner, Jonathan, 2004. "Medicare upcoding and hospital ownership," Journal of Health Economics, Elsevier, vol. 23(2), pages 369-389, March.
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