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Optimal Healthcare Contracts:Theory and Empirical Evidence from Italy

Berta, P.;, Gianni De Fraja () and Verzillos, S.;

Health, Econometrics and Data Group (HEDG) Working Papers from HEDG, c/o Department of Economics, University of York

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: patients choice; cream skimming; optimal healthcare contracts; hospitals; Lombardy (search for similar items in EconPapers)
JEL-codes: I11 I18 D82 H42 (search for similar items in EconPapers)
Date: 2018-12
New Economics Papers: this item is included in nep-cta and nep-hea
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