Do market incentives for hospitals affect health and service utilization?: evidence from prospective pay system–diagnosis‐related groups tariffs in Italian regions. (13th May 2016)

• Record Type: Journal Article
• Authors: Cappellari, Lorenzo; De Paoli, Anna; Turati, Gilberto
• Is Part Of: Journal of the Royal Statistical Society. Volume 179:Number 4(2016:Oct.)
• Page Start: 885
• Page End: 905
• Publication Date: 2016-05-13
• Subjects: Health reforms -- Subjective health perceptions -- Utilization of healthcare services; Social sciences -- Statistical methods -- Periodicals; Statistics -- Periodicals; 300.15195
• DOI: 10.1111/rssa.12204
• Languages: English
• ISSNs: 0964-1998

Abstract

Summary: We exploit variation across Italian regions in the implementation of region‐specific tariffs within a prospective pay system for hospitals based on diagnosis‐related groups to assess their effect on health and on the use of healthcare services. We consider survey data for the years 1993–2007 with information on both individuals' perceived health and their utilization of healthcare services. The results suggest that the introduction of market incentives via a fixed price payment system did not lead to worse health perceptions. Instead, it marked a moderate decrease in hospitalization coupled with a clearer decrease in the utilization of emergency services. We also find mild evidence of reduced satisfaction with healthcare services among hospital patients. These effects were stronger for adoptions occurring when also the national government supported the market‐based approach. Results are robust to sensitivity checks.