Do market incentives for hospitals affect health and service utilization?: evidence from prospective pay system-diagnosis-related groups tariffs in Italian regions

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 in...

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Bibliographic Details
Published in:Journal of the Royal Statistical Society. Series A, Statistics in society Statistics in society, 2016-10, Vol.179 (4), p.885-905
Main Authors: Cappellari, Lorenzo, De Paoli, Anna, Turati, Gilberto
Format: Article
Language:English
Subjects:
Health
Health care
Health reforms
Health services utilization
Hospitalization
Hospitals
Incentives
Markets
Medical diagnosis
Perceptions
Statistics
Subjective health perceptions
Tariffs
Utilization
Utilization of healthcare services
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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 hospitalizaron 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.
ISSN:0964-1998
1467-985X
DOI:10.1111/rssa.12204