The Impact of Bundled Payment Policy on Hospital Operations: Evidence From China

28 Pages Posted: 10 Dec 2018 Last revised: 12 May 2019

See all articles by Yiming Fan

Yiming Fan

University of Science and Technology of China (USTC), School of Management, Students

Jingqi Wang

The University of Hong Kong - Faculty of Business and Economics

Jingui Xie

School of Management, University of Science and Technology of China

Yugang Yu

University of Science and Technology of China (USTC)

Date Written: November 16, 2018

Abstract

This paper studies the impact of bundled payment policy on health care expenditures, utilization, and quality. Previous literature has primarily focused on analytical models. We empirically offer a more nuanced understanding of the impact of bundled payment policy on hospital operations and provide new evidence from China. We use insurance claim data in China to empirically evaluate the impact of bundled payment on hospital operational performance. Our evidence suggests that transitioning from fee-for-service to bundled payment reimbursement resulted in declines in expenditures and length of stay, but increases in revisits to outpatient clinics which indicates shifted care from inpatient to outpatient setting. However, the change of readmission rate to inpatient wards is insignificant. We suggest policymakers design the bundles very carefully to encourage providers implementing the new program while maintaining quality.

Keywords: Bundled payment, health care operations, length of stay, readmission

JEL Classification: I13

Suggested Citation

Fan, Yiming and Wang, Jingqi and Xie, Jingui and Yu, Yugang, The Impact of Bundled Payment Policy on Hospital Operations: Evidence From China (November 16, 2018). Available at SSRN: https://ssrn.com/abstract=3285600 or http://dx.doi.org/10.2139/ssrn.3285600

Yiming Fan

University of Science and Technology of China (USTC), School of Management, Students ( email )

China

Jingqi Wang

The University of Hong Kong - Faculty of Business and Economics ( email )

Pokfulam Road
Hong Kong
China

Jingui Xie (Contact Author)

School of Management, University of Science and Technology of China ( email )

Jinzhai Road No. 96
HEFEI, Anhui 230026
China
86(551)63606983 (Phone)

Yugang Yu

University of Science and Technology of China (USTC) ( email )

96, Jinzhai Road
Hefei, Anhui 230026
China

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