Reimbursement Schemes for Hospitals: The Impact of Case and Firm Characteristics

Ansgar Wohlschlegel, Eberhard Feess () and Helge Mueller

VfS Annual Conference 2016 (Augsburg): Demographic Change from Verein für Socialpolitik / German Economic Association

Abstract: We use data from a German health insurer to study how the impact of switching from a fee for service system (FFS) to a high powered incentive scheme (prospective payment system; PPS) depends on the characteristics of patients and hospitals. As hospitals had a transition period of several years to complete the switch, we can adopt a difference-in-differences approach by adding hospital fixed effects and a time trend. Our results support hypotheses drawn from an incentive and selection perspective: PPS reduces the length of stay of older relative to younger patients, of more severe relative to less severe cases, and in smaller relative to larger hospitals. Hospitals which adopted PPS earlier provide higher quality under PPS as proxied by the case-specific readmission rate.

Keywords: Hospital reimbursement; high-powered incentives; readmission; length of stay; difference-in-differences estimation (search for similar items in EconPapers)
JEL-codes: D22 I11 I18 (search for similar items in EconPapers)
Date: 2017, Revised 2017
New Economics Papers: this item is included in nep-eur, nep-hea and nep-reg
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https://www.econstor.eu/bitstream/10419/162045/1/Hospital_June2017.pdf (application/pdf)

Related works:
Journal Article: Reimbursement schemes for hospitals: the impact of case and firm characteristics (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc16:145776

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