Paying for Performance in Hospitals

Burkhard Hehenkamp and Oddvar Kaarboe ()

No 01/08, Working Papers in Economics from University of Bergen, Department of Economics

Abstract: A frequent form of pay-for-performance programs increase reimbursement for all services by a certain percentage of the baseline price. We examine how such a “bonus-for-quality” reimbursement scheme affects the wage contract given to physicians by the hospital management. To this end, we determine the bonus inducing hospitals to incentivize their physicians to meet the quality standard. Additionally, we show that the health care payer has to complement the bonus with a (sometimes negative) block grant. We conclude the paper relating the role of the block grant to recent experiences in the American health care market.

Keywords: Paying-for-Performance; Quality; Hospital Financing (search for similar items in EconPapers)
JEL-codes: D82 I18 J33 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2008-03-12
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Related works:
Journal Article: Paying for Performance in Hospitals (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:bergec:2008_001

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