Heterogeneous hospital response to a per diem prospective payment system
No w0193, Working Papers from New Economic School (NES)
The paper demonstrates the adverse effects of degressive rates, dependent on the percentiles of length of stay, in a prospective payment system with per diem payments. Using the dynamic panel data estimates with a recent nationwide administrative database for major diagnostic categories in 697 Japanese hospitals in July 2007- March 2012, the paper shows that average length of stay significantly increases (decreases) for hospitals in percentiles 0-25 (51-100) of the pre-reform length of stay. The decline of the average length of stay is larger for hospitals in higher percentiles of the length of stay. Hospitals in percentiles 51-100 significantly raise planned early readmission rate. As a remedy to the problem, the paper discusses the applicability of the “best practice” rate-setting.
JEL-codes: G22 I10 I18 R22 (search for similar items in EconPapers)
Pages: 31 pages
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Persistent link: https://EconPapers.repec.org/RePEc:abo:neswpt:w0193
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