Theoretical aspects of hospital reimbursement: A price discrimination model.
Item
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Title
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Theoretical aspects of hospital reimbursement: A price discrimination model.
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Identifier
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AAI9108156
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identifier
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9108156
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Creator
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Oh, Chee Ju.
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Contributor
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Adviser: Michael Grossman
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Date
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1990
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Language
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English
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Publisher
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City University of New York.
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Subject
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Economics, Theory | Health Sciences, Health Care Management
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Abstract
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This dissertation provides theoretical expectations on hospital decision making with respect to the change in reimbursement rate. Applying the framework from price discrimination monopoly theory, this study demonstrates the conditions for the existence of equilibria under alternative hospital reimbursement methods and utilizes these conditions to provide theoretical expectations.;With CBR and in case of cost-plus ({dollar}r>{dollar} 1) or full-payment (r = 1), increases in reimbursement rate lead to: (1) decreases in the number of private patients, thereby raising private patient charges, (2) increases in the number of Medicare/Medicaid patients, (3) increases in the expenditures on quality. Therefore, (4) increases in private patient charges (cross-subsidy) since dx/dr {dollar}{dollar} 0.;With CBR and in case of underpayment ({dollar}r<{dollar} 1), the changes are ambiguous. By introducing fixed quality into the model, quality effects are controlled, and increase in reimbursement rate lead to: (1) either increases in number of private patients (decreases in private patient charges:cost-shift) or decreases in number of private patients (increase in private patient charges:cross-subsidy), (2) increases in number of Medicare/Medicaid patients.;From above results and static analysis: The introduction of underpayment may be or may not be the cause of private price increase. It depends on the viewpoints of hospitals when the government policy is introduced. The size of private market which determines patient-mix({dollar}\delta{dollar}) at equilibrium and the operating situation which determines the curvature({dollar}\phi{dollar}) of average costs are key factors in clarifying the effects of government policy.;As soon as PPS(R = rc or R = r + c) is introduced into the unconstrained model, quality-access trade-off is expected in Medicare/Medicaid patients. Increases in "R" leads to decreases in the number of private patients, increases in the number of Medicare/Medicaid patients, and decreases in the expenditure on quality.
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Type
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dissertation
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Source
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PQT Legacy CUNY.xlsx
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degree
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Ph.D.
