HERO On line Working Paper Series
Hans Olav Melberg
Do changes in reimbursement fees affect hospital prioritization?
() and Kine Pedersen
Abstract: It has been argued that activity based payment systems
make hospitals focus on the diagnostic groups that are most profitable
given costs and reimbursement rates. This article tests the hypothesis by
exploring the relationship between changes in the DRG reimbursement rates
and changes in the number of registered treatment episodes for all
DRG-codes and hospitals in Norway between 2006 and 2013. The results show
that hospitals increase the number of admissions in a diagnostic group when
the reimbursement rate is increased, and decrease it (or increase it less)
when DRG-rates are reduced. Across all treatments, during all years
included in our primary analysis, the increase in volume is about four
times as large for DRG-categories with increased reimbursement compared to
DRGs with decreased reimbursement rates. However, the results also show
that the number of treatment episodes in a diagnostic category is affected
by many other factors in addition to the economic incentives.
Keywords: DRG; activity based payment system; distortions; effect of financial incentives; priorities; (follow links to similar papers)
JEL-Codes: I10; I12; I18; (follow links to similar papers)
28 pages, January 8, 2015
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