| DRG prospective payment systems: refine or not refine? | |
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MedLine Citation:
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PMID: 19780065 Owner: NLM Status: MEDLINE |
Abstract/OtherAbstract:
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We present a model of contracting between a purchaser of health services and a provider (a hospital). We assume that hospitals provide two alternative treatments for a given diagnosis: a less intensive one (for example, a medical treatment) and a more intensive one (a surgical treatment). We assume that prices are set equal to the average cost reported by the providers, as observed in many OECD countries (yardstick competition). The purchaser has two options: (1) to set one tariff based on the diagnosis only and (2) to differentiate the tariff between the surgical and the medical treatment (i.e. to refine the tariff). We show that when tariffs are refined, the provider has always an incentive to overprovide the surgical treatment. If the tariff is not refined, the hospital underprovides the surgical treatment (and overprovides the medical treatment) if the degree of altruism is sufficiently low compared with the opportunity cost of public funds. Our main result is that price refinement might not be optimal. |
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Authors:
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Elin Johanna Gudrun Hafsteinsdottir; Luigi Siciliani |
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Publication Detail:
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Type: Journal Article |
Journal Detail:
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Title: Health economics Volume: 19 ISSN: 1099-1050 ISO Abbreviation: Health Econ Publication Date: 2010 Oct |
Date Detail:
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Created Date: 2010-09-15 Completed Date: 2011-01-03 Revised Date: - |
Medline Journal Info:
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Nlm Unique ID: 9306780 Medline TA: Health Econ Country: England |
Other Details:
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Languages: eng Pagination: 1226-39 Citation Subset: IM |
Affiliation:
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Department of Economics and Related Studies, University of York, Heslington, York, UK. elinhaf@landspitali.is |
Export Citation:
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| MeSH Terms | |
Descriptor/Qualifier:
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Developed Countries Diagnosis-Related Groups / economics, organization & administration* Hospital Costs / organization & administration, statistics & numerical data Humans Models, Economic* Patient Satisfaction Severity of Illness Index |
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