GPs and Hospital Expenditures: Should We Keep Expenditure Containment Programs Alive?

Quaderni DSE Working Paper No. 829

26 Pages Posted: 4 Jun 2012

See all articles by Gianluca Fiorentini

Gianluca Fiorentini

University of Bologna - Department of Economics

Matteo Lippi Bruni

University of Bologna - Department of Economics

Cristina Ugolini

University of Bologna - Department of Economics

Date Written: June 1, 2012

Abstract

Pay-for-performance programs offering additional payments to GPs can be used not only to improve the quality of care but also for cost containment purposes. In this paper, we analyze the impact of removing financial incentives in primary care that were aimed at containing hospital expenditure in the Italian region of Emilia Romagna during the period 2002-04. Our analysis draws on regional databanks linking GPs’ characteristics to those of their patients (including all sources of public payments made to GPs), together with information on the utilization of hospital services. We employ a difference-in-difference specification to assess changes in expenditures for avoidable and total hospital admissions. We identify the treatment group with GPs operating in districts where the program is withdrawn during the observation period ('Leavers'). Their performance is compared to that of two separate control groups, namely: GPs working in districts that grant incentives for the entire period ('Stayers'), and those working in districts that never introduced measures for the containment of hospitalizations ('Non Participants').

The comparison between treatment and control groups shows that removing incentives does not result in a worse performance by Leavers compared to both control groups. This supports the policy of removing incentives, as such entail extra payments to GPs which, however, do not seem capable of significantly influencing their behavior in the desired ways. Our findings complement previous evidence from the same institutional context showing that only those programs that aim to improve disease management for specific conditions - rather than to simply contain expenditure - have proven successful in reducing avoidable admissions for the target population.

Keywords: health economics, primary care, hospital expenditure, ambulatory care sensitive conditions, economic incentives

JEL Classification: I11, I18, C31

Suggested Citation

Fiorentini, Gianluca and Lippi Bruni, Matteo and Ugolini, Cristina, GPs and Hospital Expenditures: Should We Keep Expenditure Containment Programs Alive? (June 1, 2012). Quaderni DSE Working Paper No. 829. Available at SSRN: https://ssrn.com/abstract=2075314 or http://dx.doi.org/10.2139/ssrn.2075314

Gianluca Fiorentini (Contact Author)

University of Bologna - Department of Economics ( email )

Strada Maggiore 45
Bologna, 40125
Italy

Matteo Lippi Bruni

University of Bologna - Department of Economics ( email )

Piazza Scaravilli, 2
40126 Bologna, 40126
Italy

Cristina Ugolini

University of Bologna - Department of Economics ( email )

Piazza Scaravilli 2
Bologna, 40126
Italy

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