Using fees to reduce bed-blocking: A game between hospitals and care providers
Link to article:
Kverndokk, S. and H. O. Melberg
Number in series: 2
In 2012, the Coordination Reform was introduced in Norway with an aim to change the incentives of the agents in the health sector to consider the consequences of their actions on other institutions. We study one of the policy measures in the reform, namely the introduction of a fee for bed-blocking in hospitals accompanied by budget transfers from hospitals to municipalities (care institutions). We do this by first introducing a Stackelberg game where the hospital is the leader and the care institution is the follower. The hospital decides the discharge date, taking into account the reactions of the care institution. The model shows that the reform does not necessarily lead to less bed-blocking as this depends on the relative strength of the players’ concern for income and patients’ health, and the optimal discharge date before the reform. While a tax gives an incentive to reduce bed-blocking, the effect also depends on the change in the discharge health level and the budget. We test the analytical results with data, and find that the reform had a large effect in terms of reducing bed-blocking, and that the average discharge date was significantly reduced. The interpretations of this may be that the financial incentives count more than the health incentives, or that the health effects of bed-blocking are insignificant. The last interpretation points in the direction of a relatively long average treatment time (high discharge date) before the reform which is also consistent with the theory and data from readmissions.
Project:Oppdragsgiver: Norges forskningsråd
Oppdragsgivers prosjektnr.: 220804
Frisch prosjekt: 4151 - Results of the coordination reform: Better health, better health services, better economics?