Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/103150
Authors: 
Kifmann, Mathias
Siciliani, Luigi
Year of Publication: 
2014
Series/Report no.: 
CESifo Working Paper 4977
Abstract: 
This study investigates hospitals' dynamic incentives to select patients when hospitals are remunerated according to a prospective payment system of the DRG type. Given that prices typically reflect past average costs, we use a discrete-time dynamic framework. Patients differ in severity within a DRG. Providers are to some extent altruistic. For low altruism, a downward spiral of prices is possible which induces hospitals to focus on low-severity cases. For high altruism, dynamic price adjustment depends on relation between patients' severity and benefit. In a steady state, DRG prices are unlikely to give optimal incentives to treat patients.
Subjects: 
hospitals
DRGs
selection
severity
JEL: 
I11
I18
L13
L44
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.