How to regulate heterogenous hospitals?

Brigitte Dormont and Carine Milcent

DELTA Working Papers from DELTA (Ecole normale supérieure)

Abstract: Ways to regulate French public hospitals? The purpose of this paper is to study hospital costs in the event of introduction of a Prospective Payment System in France. We use a nested three dimensional database (stays-hospitals-years) in order to identify hospital unobservable heterogeneity and a transitory moral hazard component of cost variability. Econometric estimate are performed on a sample of 7,314 stays for acute myocardial infarction observed in 36 French public hospitals over the period 1994 to 1997. Transitory moral hazard is far from negligible : its estimated standard error is about 50 % of the standard error we estimate for cost variability due to permanent unobervable heterogeneity between hospitals. Simulations show that a cost reduction of about 16 % can be expected from implmentation of a payment system which allows for permanent unobserved heterogeneity and eliminates only transitory moral hazard.

Date: 2003
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Related works:
Journal Article: How to Regulate Heterogeneous Hospitals? (2005)
Working Paper: How to regulate heterogeneous hospitals (2005)
Working Paper: How to Regulate Heterogeneous Hospistals (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:del:abcdef:2003-19

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