Journal
HEALTH ECONOMICS
Volume 24, Issue 11, Pages 1422-1436Publisher
WILEY
DOI: 10.1002/hec.3095
Keywords
global budget payment; provider behavior; noncooperative competition; hospital; common-pool resources
Funding
- CCK Foundation for International Scholarly Exchange
Ask authors/readers for more resources
Global budget payment is one of the most effective strategies for cost containment, but its impacts on provider behavior have not been explored in detail. This study examines the theoretical and empirical role of global budget payment on provider behavior. The study proposes that global budget payment with price adjustment is a form of common-pool resources. A two-product game theoretic model is derived, and simulations demonstrate that hospitals are expected to expand service volumes, with an emphasis on products with higher price-marginal cost ratios. Next, the study examines the early effects of Taiwan's global budget payment system using a difference-in-difference strategy and finds that Taiwanese hospitals exhibited such behavior, where the pursuit of individual interests led to an increase in treatment intensities. Furthermore, hospitals significantly increased inpatient service volume for regional hospitals and medical centers. In contrast, local hospitals, particularly for those without teaching status designation, faced a negative impact on service volume, as larger hospitals were better positioned to induce demand and pulled volume away from their smaller counterparts through more profitable services and products such as radiology and pharmaceuticals. Copyright (c) 2014 John Wiley & Sons, Ltd.
Authors
I am an author on this paper
Click your name to claim this paper and add it to your profile.
Reviews
Recommended
No Data Available