HERO On line Working Paper Series
Using fees to reduce bed-blocking: A game between hospitals and care providers
() and Hans Olav Melberg
Abstract: In 2012, a health reform (the Coordination Reform) was
introduced in Norway with an aim to change the incentives of the agents in
the health sector to consider the consequences of their actions on other
institutions. We study one of the policy measures in the reform, namely the
introduction of a fee for bed-blocking in hospitals accompanied by budget
transfers from hospitals to municipalities (care institutions). We do this
by first introducing a Stackelberg game where the hospital is the leader
and the care institution is the follower. The hospital decides the
discharge date, taking into account the reactions of the care institution.
The model shows that the reform does not necessarily lead to less
bed-blocking as this depends on the relative strength of the players’
concern for income and patients’ health. While a tax gives an incentive to
reduce bed-blocking, the effect also depends on the change in the discharge
health level. A reasonable outcome is that discharge time goes down, but
this may again give an incentive for the care institution to let the
patient stay longer at the hospital if it has a positive health effect.
This may partly outweigh the effect of the tax. We test the analytical
results with data, and find that the reform had a large effect in terms of
reducing bed-blocking, and that the effect of the fee becomes significantly
larger when we consider the hospitals’ strategic behaviour in reducing the
discharge time and increasing the number of patients that were reported to
be ready for discharge. The interpretations of this may be that the
financial incentives count more than the health incentives, or that the
health effects of bed-blocking are insignificant.
Keywords: Bed-blocking; care services; hospital services; health reform; Stackelberg game; (follow links to similar papers)
JEL-Codes: H75; I11; I18; (follow links to similar papers)
32 pages, February 16, 2016
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