Hospital response to prospective payment: moral hazard, selection, and practice-style effects

Article Abstract:

Three responses by which hospitals respond to changes in payment incentives were postulated. These are a moral hazard effect, a selection effect and a practice-style effect. Data for reimbursement for the treatment of mentally handicapped patients from New Hampshire's Medicaid program as of Jan. 1989 were analyzed. This was when the state started paying hospitals based on per-discharge payments and not on allocated costs. It was discovered that there was a 4.5 day decrease in the length of stay of psychiatric patients. This was attributed to reforms in the payment system. It was further suggested that hospitals were increasing their competition for patients considered to be profitable for them.

Hospital patients, Prospective payment systems (Medical care)

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Economies of scale in non-revenue producing cost centers: implications for hospital mergers

Article Abstract:

The use of scale economies in hospital mergers proves to be significant only in very small hospitals. Scale economies tend to become insignificant in hospitals incurring more than 10,000 discharges yearly. Probability also exists for efficiency gains of scale economies to be overcome by nominal price increases or cost margins in small hospitals. Gains in terms of efficiency in cost centers that do not produce revenues are found to be minimal.

Analysis, Economies of scale

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Hospital quality choice and market structure in a regulated duopoly

Article Abstract:

The research involves a controlled health care system in which quality of service information is lacking to the regulators.

Science & research, Spain, Quality Control Management, Quality control, Institutional market

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