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Do public hospitals respond to changes in DRG price regulation? The case of birth deliveries in the I talian NHS
Author(s) -
Di Giacomo Marina,
Piacenza Massimiliano,
Siciliani Luigi,
Turati Gilberto
Publication year - 2017
Publication title -
health economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.55
H-Index - 109
eISSN - 1099-1050
pISSN - 1057-9230
DOI - 10.1002/hec.3541
Subject(s) - incentive , affect (linguistics) , natural experiment , set (abstract data type) , economics , business , medicine , microeconomics , psychology , communication , pathology , computer science , programming language
Abstract We study how changes in Diagnosis‐Related Group price regulation affect hospital behaviour in quasi‐markets with exclusive provision by public hospitals. Exploiting a quasi‐natural experiment, we use a difference‐in‐differences approach to test whether public hospitals respond to an exogenous change in Diagnosis‐Related Group tariffs by increasing C‐section rates and/or by upcoding. Controlling for a detailed set of mother characteristics, we find that price changes did not affect the probability of a C‐section. We do however find evidence of upcoding: Conditional on the birth delivery method (either a C‐section or a vaginal delivery), public hospitals experiencing the largest price change exhibit a higher probability of treating patients coded as complicated. This finding suggests that even public hospitals may be sensitive to market incentives.