Introducing Activity-Based Payment in the Hospital Industry: Evidence from French Data

35 Pages Posted: 9 Jul 2013

See all articles by Philippe Choné

Philippe Choné

National Institute of Statistics and Economic Studies (INSEE) - Center for Research in Economics and Statistics (CREST); CESifo (Center for Economic Studies and Ifo Institute)

Franck Evain

Ministry of Health (DREES)

Lionel Wilner

National Institute of Statistics and Economic Studies (INSEE) - Center for Research in Economics and Statistics (CREST)

Engin Yilmaz

Ministry of Health (DREES); Ministry of Health (DREES)

Date Written: June 30, 2013

Abstract

Many countries have reformed hospital reimbursement policies to provide stronger incentives for quality and cost reduction. The purpose of this work is to understand how the effect of such reforms depends on the intensity of local competition. We build a nonprice competition model to examine the effect of a shift from global budget to patient-based payment for public hospitals in France. We predict that the number of patient admissions should increase in public hospitals by more than in private clinics and that the increase in admissions is stronger in public hospitals more exposed to competitive pressure from private clinics. Considering the reform implemented in France between 2005 and 2008, we find empirical evidence supporting these predictions.

Keywords: health care markets, prospective payment system, local competition, not-for-profit hospitals

JEL Classification: I110, I180, L330

Suggested Citation

Choné, Philippe and Evain, Franck and Wilner, Lionel and Yilmaz, Engin, Introducing Activity-Based Payment in the Hospital Industry: Evidence from French Data (June 30, 2013). CESifo Working Paper Series No. 4304, Available at SSRN: https://ssrn.com/abstract=2290942 or http://dx.doi.org/10.2139/ssrn.2290942

Philippe Choné (Contact Author)

National Institute of Statistics and Economic Studies (INSEE) - Center for Research in Economics and Statistics (CREST) ( email )

15 Boulevard Gabriel Peri
Malakoff Cedex, 1 92245
France

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Franck Evain

Ministry of Health (DREES)

Paris
France

Lionel Wilner

National Institute of Statistics and Economic Studies (INSEE) - Center for Research in Economics and Statistics (CREST) ( email )

15 Boulevard Gabriel Peri
Malakoff Cedex, 1 92245
France

Engin Yilmaz

Ministry of Health (DREES) ( email )

Paris
France

Ministry of Health (DREES) ( email )

Paris
France

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