Payment mechanism and hospital admission: New evidence from Thailand healthcare reform

Kannika Damrongplasit and Kadir Atalay

Social Science & Medicine, 2021, vol. 291, issue C

Abstract: In 2007, Thailand's Civil Servant Medical Benefit Scheme (CSMBS), one of the three main public health insurers, adopted a new payment mechanism for hospital admission. There has been a shift from fee-for-service toward Diagnostic Related Group (DRG)-based payment that transfers financial risk from the government to health care providers. This study investigates the effects of this policy change on hospital admission, frequency of admission, length of stay (LOS), type of hospital admitted, and out-of-pocket (OOP) inpatient medical expenditure. By employing nationally representative micro-level data (Health and Welfare surveys) and difference-in-difference approach, this study finds a 1 percentage point decline in hospitalization, a 10% higher chance of admission at community hospitals (the lowest level inpatient public health care facility), and a 7% less chance of admission at higher level public health care facilities like general hospitals. No significant change was observed in LOS, frequency of admission, or OOP inpatient medical expenditure associated with the post-2007 payment mechanism change. Our results emphasize the effectiveness of a close-ended payment mechanism for health care in developing countries. This study also adds to the limited literature on using micro-level data to investigate payment mechanism change in the context of low- and middle-income countries.

Keywords: Provider payment; DRG-Based payment; Hospital admission; Length of stay; Out-of-pocket expenditure (search for similar items in EconPapers)
JEL-codes: I10 I11 I12 I13 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1016/j.socscimed.2021.114456

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