Supplier-induced demand for newborn treatment: Evidence from Japan

Hitoshi Shigeoka and Kiyohide Fushimi

Journal of Health Economics, 2014, vol. 35, issue C, 162-178

Abstract: We estimate the degree of supplier-induced demand for newborn treatment by exploiting changes in reimbursement arising from the introduction of the partial prospective payment system (PPS) in Japan. Under the partial PPS, neonatal intensive care unit (NICU) utilization became relatively more profitable than other procedures, since it was excluded from prospective payments. We find that hospitals have responded to PPS adoption by increasing NICU utilization and by more frequently manipulating infants’ reported birth weights which in large part determine their maximum allowable stay in the NICU. This induced demand substantially increases the reimbursements received by hospitals.

Keywords: Supplier-induced demand; Neonatal intensive care unit; Prospective payment system; Birth weight manipulation; Hospital gaming (search for similar items in EconPapers)
JEL-codes: H51 I10 L20 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (41)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhecon:v:35:y:2014:i:c:p:162-178

DOI: 10.1016/j.jhealeco.2014.03.003

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