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Does per‐diem reimbursement necessarily increase length of stay? The case of a public psychiatric hospital

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  • Weiyan Jian
  • Yan Guo

Abstract

Payment methods can affect providers' behaviour and in turn influence the outcome of medical services. The per‐diem reimbursement method is predicted to increase length of stay (LOS) and reduce daily expenditure. Using a Difference in Differences design, this study empirically examines the impact of changing from fee‐for‐service to per‐diem reimbursement in a large psychiatric hospital in Beijing. Results show that the LOS did not increase but daily expenditure in fact increased. We provide several potential explanations for these puzzling findings, including the internal contracts between the hospitals and their physician staff among public hospitals in China. Copyright © 2009 John Wiley & Sons, Ltd.

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  • Weiyan Jian & Yan Guo, 2009. "Does per‐diem reimbursement necessarily increase length of stay? The case of a public psychiatric hospital," Health Economics, John Wiley & Sons, Ltd., vol. 18(S2), pages 97-106, July.
    • Handle: RePEc:wly:hlthec:v:18:y:2009:i:s2:p:s97-s106
    DOI: 10.1002/hec.1522
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    References listed on IDEAS

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    1. Machnes, Yaffa, 1996. "Incentives and production of mental health services," European Journal of Political Economy, Elsevier, vol. 12(3), pages 459-466, November.
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    2. Anita Mukherjee, 2021. "Impacts of Private Prison Contracting on Inmate Time Served and Recidivism," American Economic Journal: Economic Policy, American Economic Association, vol. 13(2), pages 408-438, May.
    3. Sumaiyah Docrat & Donela Besada & Susan Cleary & Crick Lund, 2020. "The impact of social, national and community-based health insurance on health care utilization for mental, neurological and substance-use disorders in low- and middle-income countries: a systematic re," Health Economics Review, Springer, vol. 10(1), pages 1-23, December.
    4. Jiwei Qian & Alex Jingwei He, 2018. "The Bonus Scheme, Motivation Crowding-out and Quality of the Doctor-Patient Encounters in Chinese Public Hospitals," Public Organization Review, Springer, vol. 18(2), pages 143-158, June.
    5. Liu, Kai & Zhang, Qian & He, Alex Jingwei, 2021. "The impacts of multiple healthcare reforms on catastrophic health spending for poor households in China," Social Science & Medicine, Elsevier, vol. 285(C).

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