Effectiveness of hospital transfer payments under a prospective payment system: An analysis of a policy change in New Zealand.

ABSTRACT: Prospective payment systems reimburse hospitals based on diagnosis-specific flat fees, which are generally based on average costs. While this encourages cost-consciousness on the part of hospitals, it introduces undesirable incentives for patient transfers. Hospitals might feel encouraged to transfer patients if the expected treatment costs exceed the diagnosis-related flat fee. A transfer fee would discourage such behavior and, therefore, could be welfare enhancing. In 2003, New Zealand introduced a fee to cover situations of patient transfers between hospitals. We investigate the effects of this fee by analyzing 4,020,796 healthcare events from 2000 to 2007 and find a significant reduction in overall transfers after the policy change. Looking at transfer types, we observe a relative redu

SUBMITTER: Schumacher C 

PROVIDER: S-EPMC9325395 | biostudies-literature | 2022 Jul

REPOSITORIES: biostudies-literature