1986 provider behavior under prosepctive reimbusement文献.pdfVIP

Journal of Health Economics 5 (1986) 129-151.North-Holland PROVIDER BEHAVIOR UNDER PROSPECTIVE REIMBURSEMENT Cost Sharing and Supply Randall P. ELLIS and Thomas G. McGUIRE* Boston University,Boston, MA 02215, USA -- . Received April 1985,final version received March 1986 This paper develops a model in which physicians choose the level of services to be provided to their patients. We show that if physicians undervalue benelits to patients relative to hospital profits, prospective payment, a system in which hospitals receive a payment dependent on the diagnosis-related group within which a patient falls, can lead to too few services being provided. In contrast, a ‘cost-based’ reimbursement system is shown to result in too many services being provided. Competition between hospitals for physicians will tend to augment both of these problems. We also examine a mixed reimbursement system, in which hosp%l reimbursements are paid partly prospectively and partly cost-based. This system is shown under a variety of circumstances to be superior to the other two reimbursement systems by improving the incentives for the efficient level of services, reducing incentives to unnecessarily admit or reclassify patients, and reducing risk to providers. I. Introduction The Health Care Financing Administration’s (HCFA) Medicare program, the largest single buyer of health care in the United States, began paying hospitals prospectively for inpatient care starting in 1983. After th