Prospective payment system: consequences for hospital-physician interactions in the private sector

Ana Mauleon, Coudeville Laurent and Dervaux Benoit
Additional contact information
Coudeville Laurent: CRESGE-LABORES, Université Catholique de Lille-France
Dervaux Benoit: CRESGE-LABORES, Université Catholique de Lille-France

No 2004011, LIDAM Discussion Papers IRES from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: In 2004, French health authorities plan to introduce a prospective payment system for hospitals delivering acute care based on the DRG classification system. In this paper, we analyze the consequences of this switch from a retrospective to a prospective payment system on the ability of physicians and hospital managers to coordinate their activity in the production of hospital stays. Our analysis follows those of Dor and Watson (1995) and Custer et al. (1990) but is adapted to the context of the French hospital private sector. Different types of interactions are considered : non-cooperative, dominant-reactive, and cooperative. The main result of this analysis is that, in a context in which average per-patient fees are maintained, the change of payment system is potentially gainful for both partners. Although their fees are not concerned by the reform, physicians are even in a better position than hospitals tot ake advantage of the change of payment system. A minimum level of coordination is nevertheless required, i.e. either cooperative or dominant-reactive interactions. Furthermore, two elements limits the importance of these potential gains : these are only one-shot gains and hence depend on the ability to reduce the length of hospital stays. Finally, some extensions regarding competition between public and private hospitals and negotiation issues are discussed.

Keywords: prospective payment system; retrospective payment system; physician behabivour, for-profit hospitals (search for similar items in EconPapers)
JEL-codes: D2 D4 I11 (search for similar items in EconPapers)
Date: 2004-04-01
New Economics Papers: this item is included in nep-edu
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://sites.uclouvain.be/econ/DP/IRES/2004-11.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvir:2004011

Access Statistics for this paper

More papers in LIDAM Discussion Papers IRES from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) Place Montesquieu 3, 1348 Louvain-la-Neuve (Belgium). Contact information at EDIRC.
Bibliographic data for series maintained by Virginie LEBLANC ().