THE DETERMINANTS OF HEALTH CARE EXPENDITURE TOWARD THE END OF LIFE: EVIDENCE FROM TAIWAN

This paper empirically investigates the relationship between the health care expenditure of end‐of‐life patients and hospital characteristics in Taiwan where (i) hospitals of different ownership differ in their financial incentives; (ii) patients are free to choose their providers; and (iii) health care services are paid for by a single public payer on a fee‐for‐services basis with a global budget cap. Utilizing insurance claims for 11 863 individuals who died during 2005–2007, we trace their hospital expenditures over the last 24 months of their lives. We find that end‐of‐life patients who are treated by private hospitals in general are associated with higher inpatient expenditures than those treated by public hospitals, while there is no significant difference in days of hospital stay. This finding is consistent with the difference in financial incentives between public and private hospitals in Taiwan. Nevertheless, we also find that the public–private differences vary across accreditation levels. Copyright © 2013 John Wiley & Sons, Ltd.     

Assessment of the introduction of DRG-based reimbursement in Switzerland: Evidence on the short-term effects on length of stay compliance in university hospitals

The implementation of a nationwide diagnosis-related groups (DRG) reimbursement system in 2012 marked an important step in increasing the transparency and efficiency of hospital services in Switzerland. However, no clear evidence exists to date on the response of hospitals to the introduction of SwissDRG. Using administrative data on inpatient stays in Swiss university hospitals and the length of stay compliance (LOSC) as a measure of hospital performance, we find a significant short-term reduction in LOSC for hospitals that experienced a change from retrospective per diem to prospective DRG reimbursement, compared to hospitals with a prospective payment system already before 2012. LOSC can be interpreted as a performance indicator because it compares the actual length of stay with a benchmark value, taken from the yearly DRG catalogue. The reduction in LOSC implies that hospitals in the treatment group on average had an increase in LOS relative to the benchmark compared to the control hospitals. This may be interpreted as a negative effect of SwissDRG on hospital performance, at least in the short-run, and we provide supporting evidence that hospitals that worked under DRG already before adapted more quickly and efficiently.     

Supplementary private health insurance: The impact of physician financial incentives on medical practice

In the French diagnosis-related group (DRG)-based payment system, both private and public hospitals are financed by a public single payer. Public hospitals are overcrowded and have no direct financial incentives to choose one procedure over another. If a patient has a strong preference, they can switch to a private hospital. In private hospitals, the preference does come into play, but the patient has to pay for the additional cost, for which they are reimbursed if they have supplementary private health insurance. Do financial incentives from the fees received by physicians for different procedures drive their behavior? Using French exhaustive data on delivery, we find that private hospitals perform significantly more cesarean deliveries than public hospitals. However, for patients without private health insurance, the two sectors differ much less in terms of cesareans rate. We determine the impact of the financial incentive for patients who can afford the additional cost. Affordability is mainly ensured by the reimbursement of costs by private health insurance. These findings can be interpreted as evidence that, in healthcare systems where a public single payer offers universal coverage, the presence of supplementary private insurance can contribute to creating incentives on the supply side and lead to practices and an allocation of resources that are not optimal from a social welfare perspective.     

Changing physicians’ incentives to control the C-section rate: Evidence from a major health care reform in Iran

We evaluate the effect of a major health care policy in public hospitals which changed the demand and supply side incentives for c-section procedures in 2014 in Iran, where the c-section rate at the time was 55%. Following the reform, vaginal delivery became free for patients. The policy also introduced financial incentives to doctors for performing vaginal deliveries and set a cap on their maximum c-section rate. We show that supply side incentives had a major role in the effectiveness of the programme, after which the national rate reduced by 6 percentage points. This reduction was mainly driven by first-birth mothers. The reform also shifted doctors with high c-section rates out of public hospitals. We cannot find any adverse effect on Apgar score, hospitalisation or mortality; however, gestation length and birth weight significantly increased.     

Average‐Cost Pricing and Dynamic Selection Incentives in the Hospital Sector

This study investigates dynamic incentives to select patients for hospitals that are remunerated according to a prospective payment system of the diagnosis‐related group (DRG) type. Using a model with patients differing in severity within a DRG, we show that price dynamics depend on the extent of hospital altruism and the relation between patients' severity and benefit. Upwards and downwards price movements over time are both possible. In a steady state, DRG prices are unlikely to give optimal incentives to treat patients. Depending on the level of altruism, too few or too many patients are treated. DRG pricing may also give incentives to treat low‐severity patients even though high‐severity patients should be treated. Copyright © 2016 John Wiley & Sons, Ltd.     

Effect of early‐stage Alzheimer's disease on household financial outcomes

Significant limitations and rapid declines in financial capacity are a hallmark of patients with early‐stage Alzheimer's disease (AD). We use linked Health and Retirement Study and Medicare claims data spanning 1992–2014 to examine the effect of early‐stage AD, from the start of first symptoms to diagnosis, on household financial outcomes. We estimate household fixed‐effects models and examine continuous measures of liquid assets and net wealth, as well as dichotomous indicators for a large change in either outcome. We find robust evidence that early‐stage AD places households at significant risk for large adverse changes in liquid assets. Further, we find some, but more limited, evidence that early‐stage AD reduces net wealth. Our findings are consequential because financial vulnerability during the disease's early‐stage impacts the ability of afflicted individuals and their families to pay for care in the disease's later stage. Additionally, the findings speak to the value that earlier diagnosis may provide by helping avert adverse financial outcomes that occur before the disease is currently diagnosable with available tools. These results also point to a potentially important role for financial institutions in helping reduce exposure of vulnerable elderly to poor outcomes.     

Can conditional cash transfers improve maternal health care? Evidence from El Salvador's Comunidades Solidarias Rurales program

There is growing evidence on positive human capital impacts of large, poverty‐focused cash transfer programs. However, evidence is inconclusive on whether cash transfer programs affect maternal health outcomes, and if so, through which pathways. We use a regression discontinuity design with an implicit threshold to evaluate the impact of Comunidades Solidarias Rurales in El Salvador on four maternal health service utilization outcomes: (a) prenatal care; (b) skilled attendance at birth; (c) birth in health facilities; and (d) postnatal care. We find robust impacts on outcomes at the time of birth but not on prenatal and postnatal care. In addition to income effects, supply‐side health service improvements and gains in women's agency may have played a role in realizing these gains. With growing inequalities in maternal health outcomes globally, results contribute to an understanding of how financial incentives can address health systems and financial barriers that prevent poor women from seeking and receiving care at critical periods for both maternal and infant health.     

农村通向全民健康覆盖的障碍及其原因分析——基于供需双方经济激励机制角度

以宁夏回族自治区为案例,本研究对五个样本县进行大规模家庭入户调查、乡镇卫生院和村卫生室机构调查,分析了西部农村通向全民健康覆盖之路的障碍,并从供需双方经济激励机制角度剖析其原因.分析认为西部农村面临基层门诊服务可及性不足,居民经济负担沉重;服务流向不合理,资源配置效率低下;基层供方服务技术效率和质量不佳等问题.造成这些障碍的原因包括：从需方角度来看,新农合保障“轻门诊重住院、轻基层重高层”的特点;从供方角度剖析,对村医经济激励效力低下,按项目付费提供不恰当的经济刺激,难以引导供方提高自身服务效率和质量,以及欠缺促进体系整合的激励.     

PHYSICIAN RESPONSE TO PAY‐FOR‐PERFORMANCE: EVIDENCE FROM A NATURAL EXPERIMENT

This study exploits a natural experiment in the province of Ontario, Canada, to identify the impact of pay‐for‐performance (P4P) incentives on the provision of targeted primary care services and whether physicians' responses differ by age, size of patient population, and baseline compliance level. We use administrative data that cover the full population of Ontario and nearly all the services provided by primary care physicians. We employ a difference‐in‐differences approach that controls for selection on observables and selection on unobservables that may cause estimation bias. We implement a set of robustness checks to control for confounding from other contemporaneous interventions of the primary care reform in Ontario. The results indicate that responses were modest and that physicians responded to the financial incentives for some services but not others. The results provide a cautionary message regarding the effectiveness of employing P4P to increase the quality of health care. Copyright © 2013 John Wiley & Sons, Ltd.     

Price Changes in Regulated Healthcare Markets: Do Public Hospitals Respond and How?

This paper examines the behaviour of public hospitals in response to the average payment incentives created by price changes for patients classified in different diagnosis‐related groups (DRGs). Using panel data on public hospitals located within the Italian region of Emilia‐Romagna, we test whether a 1‐year increase in DRG prices induced public hospitals to increase their volume of activity and whether a potential response is associated with changes in waiting times and/or length of stay. We find that public hospitals reacted to the policy change by increasing the number of patients with surgical treatments. This effect was smaller in the 2 years after the policy change than in later years, and for providers with a lower excess capacity in the pre‐policy period, whereas it did not vary significantly across hospitals according to their degree of financial and administrative autonomy. For patients with medical DRGs, instead, there appeared to be no effect on inpatient volumes. Our estimates also suggest that an increase in DRG prices had no impact on the proportion of patients waiting more than 6 months. Finally, we find no evidence of a significant effect on patients' average length of stay. Copyright © 2016 John Wiley & Sons, Ltd.     

The Impact of Physician Supply on the Healthcare System: Evidence from Japan's New Residency Program

Using a 2004 Japanese natural experiment affecting physician supply, we study the physician labor market and its effects on hospital exits and health outcomes. Although physicians play a central role in determining the performance of a healthcare system, identifying their impacts are difficult because physician supply is endogenously determined. We circumvent the problem by exploiting an exogenous shock to physician supply created by the introduction of a new residency program – our natural experiment. Based on panel data covering all physicians in Japan, we find that the introduction of a new residency program substantially decreased the supply of physicians in some rural markets where local hospitals had relied on university hospitals for filling physician positions. We also find that physician market wages increased in the affected markets relative to less affected markets. Finally, we find that this change in physician market wages forced hospitals to exit affected markets and negatively affected patient health outcomes in those markets. These effects may be exacerbated by the fact that the healthcare market was rigidly price‐regulated. Copyright © 2015 John Wiley & Sons, Ltd.     

Do hospitals respond to decreasing prices by supplying more services?

Regulated prices are common in markets for medical care. We estimate the effect of changes in regulated reimbursement prices on volume of hospital care based on a reform of hospital financing in Germany. Uniquely, this reform changed the overall level of reimbursement—with increasing prices for some hospitals and decreasing prices for others—without directly affecting the relative prices for different groups of patients or types of treatment. Based on administrative data, we find that hospitals react to increasing prices by decreasing the service supply and to decreasing prices by increasing the service supply. Moreover, we find some evidence that volume changes for hospitals with different price changes are nonlinear. We interpret our findings as evidence for a negative income effect of prices on volume of care.     

Price effects of a hospital merger: Heterogeneity across health insurers,hospital products,and hospital locations

In most studies on hospital merger effects, the unit of observation is the merged hospital, whereas the observed price is the weighted average across hospital products and across payers. However, little is known about whether price effects vary between hospital locations, products, and payers. We expand existing bargaining models to allow for heterogeneous price effects and use a difference‐in‐differences model in which price changes at the merging hospitals are compared with price changes at comparison hospitals. We find evidence of heterogeneous price effects across health insurers, hospital products and hospital locations. These findings have implications for ex ante merger scrutiny.     

Do private hospitals outperform public hospitals regarding efficiency,accessibility, and quality of care in the European Union? A literature review

European countries have enhanced the scope of private provision within their health care systems. Privatizing services have been suggested as a means to improve access, quality, and efficiency in health care. This raises questions about the relative performance of private hospitals compared with public hospitals. Most systematic reviews that scrutinize the performance of the private hospitals originate from the United States. A systematic overview for Europe is nonexisting. We fill this gap with a systematic realist review comparing the performance of public hospitals to private hospitals on efficiency, accessibility, and quality of care in the European Union. This review synthesizes evidence from Italy, Germany, the United Kingdom, France, Greece, Austria, Spain, and Portugal. Most evidence suggests that public hospitals are at least as efficient as or are more efficient than private hospitals. Accessibility to broader populations is often a matter of concern in private provision: Patients with higher social‐economic backgrounds hold better access to private hospital provision, especially in private parallel systems such as the United Kingdom and Greece. The existing evidence on quality of care is often too diverse to make a conclusive statement. In conclusion, the growth in private hospital provision seems not related to improvements in performance in Europe. Our evidence further suggests that the private (for‐profit) hospital sector seems to react more strongly to (financial) incentives than other provider types. In such cases, policymakers either should very carefully develop adequate incentive structures or be hesitant to accommodate the growth of the private hospital sector.     

A Note on the Comparative Statics of Pay‐for‐Performance in Health Care

Pay‐for‐performance (P4P) is a widely implemented quality improvement strategy in health care that has generated much enthusiasm, but only limited empirical evidence to support its effectiveness. Researchers have speculated that flawed program designs or weak financial incentives may be to blame, but the reason for P4P's limited success may be more fundamental. When P4P rewards multiple services, it creates a special case of the well‐known multitasking problem, where incentives to increase some rewarded activities are blunted by countervailing incentives to focus on other rewarded activities: these incentives may cancel each other out with little net effect on quality. This paper analyzes the comparative statics of a P4P model to show that when P4P rewards multiple services in a setting of multitasking and joint production, the change in both rewarded and unrewarded services is generally ambiguous. This result contrasts with the commonly held intuition that P4P should increase rewarded activities. Copyright © 2015 John Wiley & Sons, Ltd.     

How does birth weight affect health and human capital? A short‐ and long‐term evaluation

In utero shocks have been shown to have long‐lasting consequences. However, we hardly know whether these effects tend to fade out over time and whether they can be compensated by post‐natal investments. This paper examines the effect of birth endowment over time by employing a long panel of individuals born in 1983 in Cebu (Philippines) that includes relevant information on the pregnancy. We build a refined health endowment measure netted out from prenatal investments. We find that initial endowments affect trajectories both through the human capital production function and subsequent parental investment. The effect of birth endowment remains until adulthood and the fading out is very limited for health outcomes but more pronounced for educational outcomes. We also find that parents tend to reinforce initial health endowments, but the effect of this behaviour has almost no effect on final outcomes.     

Hospital reimbursement and capacity constraints: Evidence from orthopedic surgeries

Health care providers’ response to payment incentives may have consequences for both fiscal spending and patient health. This paper studies the effects of a change in the payment scheme for hospitals in Norway. In 2010, payments for patients discharged on the day of admission were substantially decreased, while payments for stays lasting longer than one day were increased. This gave hospitals incentives to shift patients from one-day stays to two-day stays, or to decrease the admission of one-day stays. I study hospital responses using two separate difference-in-differences estimation strategies, exploiting, first, the difference in price changes across diagnoses, and secondly, the difference in bed capacity across hospitals. Focusing on orthopedic patients, I find no evidence that hospitals respond to price changes, and capacity constraints do not appear to explain this finding. Results imply that the current payment policy yields little scope for policymakers to affect the health care spending and treatment choices.     

Can a results‐based bottom‐up reform improve health system performance? Evidence from the rural health project in China

In 2008, the Rural Health Project (Health XI) was initiated in 40 Chinese counties to pilot interventions aimed at improving local health systems. Performance targets were pre‐specified (results‐based), and project counties were allowed to tailor their interventions (bottom‐up) in recognition of the substantial regional variations. Using household data from the China National Health Services Survey in a difference‐in‐differences strategy combined with matching, we find that project counties have improved outcomes (both incentivized and not‐directly‐incentivized) in all three domains examined—medical care, public health services, and self‐rated health—by 2013. In particular, the decrease in outpatient intravenous drip use and financial strain and the increase in all four components of public health services provision are robust to a variety of tests and alternative matching strategies. Results for not‐directly‐incentivized indicators suggest that results‐based payment did not lead to multitasking problems but rather to positive spillovers. On the other hand, little improvement in inpatient‐related indicators suggests that the Health XI interventions did not successfully redress the perverse incentives driving the bulk of providers' income. In general, however, our results indicate that interventions adopted in the results‐based bottom‐up approach generated substantial benefits given the investment.