Working Paper: CEPR ID: DP13357
Authors: Paolo Berta; Gianni De Fraja; Stefano Verzillo
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
JEL Codes: I11; I18; D82; H42
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| contracts between healthcare purchaser and hospitals (L14) | incentives for efficient providers (D61) |
| incentives for efficient providers (D61) | treat higher volume of patients (I11) |
| incentives for efficient providers (D61) | treat more complex cases (I11) |
| treat higher volume of patients (I11) | higher average payments per treatment (I11) |
| treat more complex cases (I11) | higher average payments per treatment (I11) |
| patient choice (I11) | cream skimming (D49) |
| cream skimming (D49) | hospital patient mix (I11) |
| patient choice (I11) | complexity of cases treated at hospitals (I11) |
| higher proportion of complex patients (I11) | higher reimbursements (I18) |
| higher reimbursements (I18) | implications for patient outcomes (I14) |