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

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 transfe...

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Detalles Bibliográficos
Autor principal: Schumacher, Christoph
Formato: Online Artículo Texto
Lenguaje:English
Publicado: John Wiley and Sons Inc. 2022
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9325395/
https://www.ncbi.nlm.nih.gov/pubmed/35384112
http://dx.doi.org/10.1002/hec.4508
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author Schumacher, Christoph
author_facet Schumacher, Christoph
author_sort Schumacher, Christoph
collection PubMed
description 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 reduction in transfers to non‐specialist hospitals but a relative increase in transfers to specialist facilities. It suggests that the policy change created a focusing effect that encourages public health care providers to transfer patients only when necessary to specialized providers and retain those patients they can treat. We also find no evidence that the transfer fee harmed the quality of care, measured by mortality, readmission and length of stay. The broader policy recommendation of this research is the introduction or reassessment of transfer payments to improve funding efficiency.
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spelling pubmed-93253952022-07-30 Effectiveness of hospital transfer payments under a prospective payment system: An analysis of a policy change in New Zealand Schumacher, Christoph Health Econ Research Articles 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 reduction in transfers to non‐specialist hospitals but a relative increase in transfers to specialist facilities. It suggests that the policy change created a focusing effect that encourages public health care providers to transfer patients only when necessary to specialized providers and retain those patients they can treat. We also find no evidence that the transfer fee harmed the quality of care, measured by mortality, readmission and length of stay. The broader policy recommendation of this research is the introduction or reassessment of transfer payments to improve funding efficiency. John Wiley and Sons Inc. 2022-04-05 2022-07 /pmc/articles/PMC9325395/ /pubmed/35384112 http://dx.doi.org/10.1002/hec.4508 Text en © 2022 The Authors. Health Economics published by John Wiley & Sons Ltd. https://creativecommons.org/licenses/by-nc-nd/4.0/This is an open access article under the terms of the http://creativecommons.org/licenses/by-nc-nd/4.0/ (https://creativecommons.org/licenses/by-nc-nd/4.0/) License, which permits use and distribution in any medium, provided the original work is properly cited, the use is non‐commercial and no modifications or adaptations are made.
spellingShingle Research Articles
Schumacher, Christoph
Effectiveness of hospital transfer payments under a prospective payment system: An analysis of a policy change in New Zealand
title Effectiveness of hospital transfer payments under a prospective payment system: An analysis of a policy change in New Zealand
title_full Effectiveness of hospital transfer payments under a prospective payment system: An analysis of a policy change in New Zealand
title_fullStr Effectiveness of hospital transfer payments under a prospective payment system: An analysis of a policy change in New Zealand
title_full_unstemmed Effectiveness of hospital transfer payments under a prospective payment system: An analysis of a policy change in New Zealand
title_short Effectiveness of hospital transfer payments under a prospective payment system: An analysis of a policy change in New Zealand
title_sort effectiveness of hospital transfer payments under a prospective payment system: an analysis of a policy change in new zealand
topic Research Articles
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9325395/
https://www.ncbi.nlm.nih.gov/pubmed/35384112
http://dx.doi.org/10.1002/hec.4508
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