Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/92701
Authors: 
Takahara, Tsuyoshi
Year of Publication: 
2013
Series/Report no.: 
ISER Discussion Paper, Institute of Social and Economic Research, Osaka University 891
Abstract: 
We analyze the rationale for official authorization of patient dumping in the prospectivepayment policy framework. We show that when the insurer designs the healthcare payment policy to let hospitals dump high-cost patients, there is a trade-off between the disutility of dumped patients (changes in hospitals' rent extracting due to low-severity patients) and the shift in the cost-reduction effort level for high-severity patients. We also clarify the welfare-improving conditions by allowing hospitals to dump high-severity patients. Finally, we show that if the efficiency of the cost-reduction effort varies by much and the healthcare payment cost is large, or if there exist many private hospitals, the insurer can improve social welfare in a wider environment.
Subjects: 
patient dumping
healthcare payment policy
adverse selection
JEL: 
I13
I18
L51
Document Type: 
Working Paper

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