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Optimal Healthcare Contracts: Theory and Empirical Evidence from Italy

Paolo Berta, Gianni De Fraja () and Stefano Verzillo

No 13357, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: In this paper we investigate the nature of the contracts between a large health-care purchaser and health service providers in a prospective payment system. We model theoretically the interaction between patients choice and cream-skimming by hospitals. We test the model using a very large and detailed administrative dataset for the largest region in Italy. In line with our theoretical results, we show that the state funded purchaser offers providers a system of incentives such that the most efficient providers both treat more patients and also treat more difficult patients, thus receiving a higher average payment per treatment.

Keywords: Cream skimming; Hospitals; Lombardy; Optimal healthcare contracts; Patients choice (search for similar items in EconPapers)
JEL-codes: D82 H42 I11 I18 (search for similar items in EconPapers)
Date: 2018-12
New Economics Papers: this item is included in nep-eur
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