Heterogeneous hospital response to per diem prospective payment system
نویسندگان
چکیده
The paper provides theoretical analysis for hospitalsheterogeneity in the response to the change from the the fee-for-service (FFS) system to a per diem prospective payment system with a length-of-stay dependent step-down rate (SDR): hospitals with shorter (longer) average length of stay under FFS have longer (shorter) average length of stay under SDR. We also show that for FFS hospitals with longer average length of stay the planned readmission rate is to increase under the SDR. Using a recent administrative database for 684 Japanese hospitals in 2007-2011, we conduct estimations with dynamic panel data and nd an empirical support for the predictions of our theoretical model. The results suggest that step-down rate contributes to di¤erential hospitals response to a per diem prospective payment system and might lead to insu¢ cient cost containment. Besstremyannaya: gbesstre@ce r.ru, Center for Economic and Financial Research at New Economic School, Nakhimovsky prospekt 47, Moscow 117418 Russia; Shapiro: [email protected], Belk College of Business, University of North Carolina, 9201 University City Boulevard, Charlotte NC 28223-0001, USA.
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