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Private choices,public costs: Evaluating cost-shifting between private and public health sectors in New Zealand
Authors:Erin Penno  Trudy Sullivan  Dave Barson  Robin Gauld
Institution:1. Department of Preventive and Social Medicine, University of Otago, Dunedin, New Zealand;2. Centre for Health Systems and Technology, University of Otago, New Zealand;3. Otago Business School, University of Otago, Dunedin, New Zealand;1. School of Public Administration, Faculty of Management, Dahousie University, 6100 University Avenue, Halifax, Nova Scotia, B3H 3N4, Canada;2. Department of Community Health and Epidemiology, Faculty of Medicine, Dalhousie University, Halifax, Nova Scotia, Canada;3. Jean Monnet European Union Centre for Excellence, Dalhousie University, 6299 South Street, Halifax, Nova Scotia, B3H 4R2, Canada;4. College of Economic Analysis, SGH Warsaw School of Economics, ul. Madalińskiego 6/8, 02-513 Warszawa, Poland;5. Department of Sociology and Social Anthropology, Dalhousie University, 6135 University Avenue, Halifax, Nova Scotia, B3H 4R2, Canada;8. Faculty of Health Sciences, Simon Fraser University, 8888 University Drive, Burnaby, British Columbia, V5A 1S6, Canada;1. Department of Obstetrics and Gynaecology, Erasmus MC, University Medical Centre, PO Box 2040, 3000 CA, Rotterdam, the Netherlands;2. Dutch Research Institute for Transitions, Erasmus University Rotterdam, PO Box 1738, 3000 DR, Rotterdam, the Netherlands;3. Department of Paediatrics, Erasmus MC – Sophia Children’s Hospital, University Medical Centre Rotterdam, PO Box 2040, 3000 CA, Rotterdam, the Netherlands;4. Department of Public Health, Erasmus MC, University Medical Centre Rotterdam, PO Box 2040, 3000 CA, Rotterdam, the Netherlands;5. Pharos, The Dutch Centre of Expertise on Health Disparities, PO Box 13318, 3507 LH, Utrecht, the Netherlands;1. Pharmacy Departament, Hospital Virgen de las Nieves, Avenida de las Fuerzas Armadas 2, 18014, Granada, Spain;2. Laboratory Deopartament, Hospital Clínico San Cecilio, Avenida de la Innovación, s/n, 18016, Granada, Spain;3. Pharmacy Departament, Hospital Virgen Macarena, Calle Dr. Fedriani, 3, 41009 Sevilla, Spain;4. Department of Physicochemistry, School of Pharmacy, University of Granada, Spain;5. Pharmacy Departament, Hospital de Poniente, Carretera de Almerimar, 31, 04700, El Ejido, Spain;1. Medical Governance Research Institute, Minato-ku, Tokyo, Japan;2. Department of Breast Surgery, Jyoban Hospital of Tokiwa Foundation, Iwaki, Fukushima, Japan;3. Department of Gastroenterology, Sendai Kousei Hospital, Sendai, Miyagi, Japan;4. Department of Surgery, Minamisoma Municipal General Hospital, Minamisoma, Fukushima, Japan;5. Department of Internal Medicine, Navitas Clinic, Tachikawa, Tokyo, Japan;1. Department of Public Health and Primary Care, Ghent University, Corneel Heymanslaan 10, 9000, Ghent, Belgium;2. Department of Marketing, Innovation and Organization, Ghent University, Tweekerkenstraat 2, 9000, Ghent, Belgium
Abstract:New Zealand’s dual public-private health system allows individuals to purchase health services from the private sector rather than relying solely upon publicly-funded services. However, financial boundaries between the public and private sectors are not well defined and patients receiving privately-funded care may subsequently seek follow-up care within the public health system, in effect shifting costs to the public sector. This study evaluates this phenomenon, examining whether cost-shifting between the private and public hospital systems is a significant issue in New Zealand.We used inpatient discharge data from 2013/14 to identify private events with a subsequent admission to a public hospital within seven days of discharge. We examined the frequency of subsequent public admissions, the demographic and clinical characteristics of the patients and estimated the direct costs of inpatient care incurred by the public health system.Approximately 2% of private inpatient events had a subsequent admission to a public hospital. Overall, the costs to the public system amounted to NZ$11.5 million, with a median cost of NZ$2800. At least a third of subsequent admissions were related to complications of a medical procedure.Although only a small proportion of private events had a subsequent public admission, the public health system incurred significant costs, highlighting the need for greater understanding and discussion around the interface between the public and private health systems.
Keywords:Inpatient  Public sector  Private sector  New Zealand  Costs and cost analysis  Patient readmission
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