Using fees to reduce bed-blocking: A game between hospitals and long-term care providers

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Kverndokk, S. and H. O. Melberg




European Journal of Health Economics

22(6), 931-949


In several countries, a fee has been introduced to reduce bed-blocking in hospitals. This paper studies the implications of this fee for the strategic decisions of the hospitals and the long-term care providers. We introduce a Stackelberg game where the hospital is the leader and the care provider the follower. The policy reduces the treatment time at the hospital but does not necessarily lead to less bed-blocking, as this depends on the treatment time and bed-blocking before the reform. We test the results with data from the Norwegian Coordination Reform introduced in 2012 and find that this reform led to a large reduction in bed-blocking. The direct effect was even larger than a naïve comparison would suggest because hospitals began to report patients as ready to be discharged earlier than before the reform. Confronted with the theoretical predictions, this would mean that hospital services in average were set relatively close to the minimum levels before the reform.


H75; I11; I18


Bed-blocking; care services; hospital services; health reform; Stackelberg game


Oppdragsgiver: NFR
Oppdragsgivers prosjektnr.: 256570
Frisch prosjekt: 4116 - Incentives, Efficiency and Quality of Care in Long Term Care For The Elderly

Oppdragsgiver: Norges forskningsråd
Oppdragsgivers prosjektnr.: 220804
Frisch prosjekt: 4151 - Results of the coordination reform: Better health, better health services, better economics?