Beiträge zur Jahrestagung des Vereins für Socialpolitik 2016: Demographischer Wandel - Session: Health I B09-V2
We use a unique dataset from a German health insurer to study how the effects of the introduction of a high powered incentive scheme for hospitals on cost effectiveness and quality of medical treatment depend on case and hospital characteristics. As hospitals had a transition period of several years to complete the switch from a fee-for-service to a prospective-payment system, we can adopt a difference-in-differences approach. All hospitals had to switch eventually, which limits the potential for selection bias. Furthermore, we can follow a patient even when readmitted to a different hospital. We find that the readmission rate increases for more severe cases, and that the length of stay of older people decreases more under the new system. The average length of stay did not change significantly but the readmission rate increased. However, this latter effect is absent in privately owned or university hospitals.