TY - JOUR
T1 - Hospital cost and efficiency under per service and per case payment in Maryland
T2 - a tale of the carrot and the stick.
AU - Salkever, D. S.
AU - Steinwachs, D. M.
AU - Rupp, A.
PY - 1986/3/1
Y1 - 1986/3/1
N2 - The simultaneous operation of per case and per service payment systems in Maryland, and the varying levels of stringency used in setting per case rates, allows a comparison of the effects of differing incentive structures on hospital costs. This paper presents such a comparison with 1977-1981 data. Regressions performed on cost-per-case and total cost data indicate that costs were lower only when per case payment limits were very stringent. Positive net revenue incentives appeared to be insufficient to induce a reduction in length of stay or ancillary services use. These changes in medical practice patterns thus appear more likely under the threat of financial losses--that is, under the threat of the stick rather than the inducement of the carrot.
AB - The simultaneous operation of per case and per service payment systems in Maryland, and the varying levels of stringency used in setting per case rates, allows a comparison of the effects of differing incentive structures on hospital costs. This paper presents such a comparison with 1977-1981 data. Regressions performed on cost-per-case and total cost data indicate that costs were lower only when per case payment limits were very stringent. Positive net revenue incentives appeared to be insufficient to induce a reduction in length of stay or ancillary services use. These changes in medical practice patterns thus appear more likely under the threat of financial losses--that is, under the threat of the stick rather than the inducement of the carrot.
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M3 - Article
C2 - 2937730
AN - SCOPUS:0022685449
SN - 0046-9580
VL - 23
SP - 56
EP - 66
JO - Inquiry : a journal of medical care organization, provision and financing
JF - Inquiry : a journal of medical care organization, provision and financing
IS - 1
ER -