A Proposal for Incentive Reimbursement for Hospitals

In the early 1960's, a number of observers argued that the current method of reimbursing hospitals by third parties would be a factor contributing to increasing hospital costs. In this report, we analyze one method of reimbursing hospitals—we postulate and test a number of hypotheses about the nature of the incentives that are built into the program, and then propose an alternative way of reimbursing hospitals. It is argued that a prospective reimbursement formula be negotiated and developed that depends on two factors: 1. an agreed upon rate of general inflation, and 2. an estimated cost function which captures important aspects of the case-mix which accounts for differential costs across hospitals. The cost function is presented, and various aspects of the proposed formula are discussed

Actuarial science · Business · Cost control · Differential (mechanical device) · Economics · Function (biology) · Health care · Incentive · Inflation (cosmology) · Microeconomics · Operations management · Payment · Prospective payment system · Reimbursement · Engineering · Finance · Healthcare Policy and Management · Medicine

• An Analysis of Case Mix Complexity Using Information Theory and Diagnostic Related Grouping

  Susan D Horn, Dale N Schumacher•Medical Care•1979

  Incluir item

• Measuring hospital output

  Open Access•Michael Tatchell•Social Science & Medicine•1983

  Incluir item