Financial Incentives, Hospital Care, and Health Outcomes: Evidence from Fair Pricing Laws

Batty, M; Ippolito, Benedic

doi:10.1257/pol.20160060

Cited by 14 publications

(12 citation statements)

References 29 publications

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“…Tariffs setting based on an optimal payment system that involves mixed levels of both demand-side and supply-side cost-sharing is the main step in rationalizing health services. It is widely believed that nancial incentives of health care providers affect their care delivery behaviour and e ciency of health care [61][62][63]. Any change in the medical tariffs should be determined using evidence-based and transparent criteria, imposed by fair pricing laws to ensure providers are given the right motivations and incentives for effective delivery of services [61].…”

Section: Discussionmentioning

confidence: 99%

“…It is widely believed that nancial incentives of health care providers affect their care delivery behaviour and e ciency of health care [61][62][63]. Any change in the medical tariffs should be determined using evidence-based and transparent criteria, imposed by fair pricing laws to ensure providers are given the right motivations and incentives for effective delivery of services [61]. Also in setting tariffs, the input costs of the services (including physical standards and expertise), the complexity of the services and the time required, risk of adverse outcomes, long term follow up requirements, geographical location and setting of care are among other factors that should be considered [64].…”

Section: Discussionmentioning

confidence: 99%

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Setting Health Care Services Tariffs in Iran: Half a Century Quest for a Window of Opportunity

Doshmangir

Rashidian

Kouhi³

et al. 2020

Preprint

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Background: The process of medical tariffs setting in Iran remains to be a contentious issue and is heavily criticized by many stakeholders. This paper explores the experience of setting health care services tariffs in the Iranian health care system over the last five decades. Methods: We analyzed data collected through literature review and reviews of the official documents developed at the various levels of the Iranian health system using inductive and deductive content analysis. Twenty-two face-to-face semi-structured interviews supplemented the analysis. Data were analysed and interpreted using 'policy triangle' and 'garbage can' models.Results: Our comprehensive review of changes in the medical tariff setting provides valuable lessons for major stakeholders. Most changes were implemented in a sporadic, inadequate, and a non-evidence-based manner. Disparities in tariffs between public and private sectors continue to exist. Lack of clarity in tariffs setting mechanisms and its process makes negotiations between various stakeholders difficult and can potentially become a source of a corrupt income. Such clarity can be achieved by using fair and technically sound tariffs. Technical aspects of tariff setting should be separated from the political negotiations over the overall payment to the medical professionals. Transparency regarding a conflict of interest and establishing punitive measures against those violating the rules could help improving trust in the doctor-patient relationship. Conclusion: Use of evidence-informed models and methods in medical tariff setting could help to strike the right balance in the process of health care services provision to address health system objectives. A sensitive application of policy models can offer significant insights into the nature of medical tariff setting and highlight existing constraints and opportunities. This study generates lessons learned in tariffs setting, particularly for low- and middle-income countries.

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Section: Discussionmentioning

confidence: 99%

Section: Discussionmentioning

confidence: 99%

Setting Health Care Services Tariffs in Iran: Half a Century Quest for a Window of Opportunity

Doshmangir

Rashidian

Kouhi³

et al. 2020

Preprint

View full text Add to dashboard Cite

show abstract

“…The findings of this study suggest that major problems in the Tariffs setting based on an optimal payment system that involves mixed levels of both demand-side and supply-side cost-sharing is the main step in rationalizing health services. It is widely believed that financial incentives of health care providers affect their care delivery behavior and efficiency of health care [71][72][73], so any change in the medical tariffs should be determined using evidence-based and transparent criteria, imposed by fair pricing laws to ensure providers are given the right motivations and incentives for effective delivery of services [71]. Also in setting tariffs, the input costs of the services (including physical standards and expertise), the complexity of the services and the time required, risk of adverse outcomes, long term follow up requirements, geographical location and setting of care are among other factors that should be considered [74].…”

Section: Payment Mechanisims and Financing System And Pricing Medicalmentioning

confidence: 99%

Setting Health Care Services Tariffs in Iran: Half a Century Quest for a Window of Opportunity

Doshmangir

Rashidian

Kouhi³

et al. 2020

Preprint

View full text Add to dashboard Cite

Background Pricing health services remains to be a contentious issue in Iran. The Universal Health Services Insurance Law of 1994 aimed at introducing structural and legal bases for pricing health services to enhance efficiency and to equate demand and supply, while referring to equity objectives. Until now, the implementation of this law has failed to meet its original objectives. This paper explores the experience of setting health care services tariffs in the Iranian health care system over the last five decades. Methods We analyzed data collected through documentary and literature reviews of the official documents developed at the various levels of the Iranian health using inductive and deductive content analysis. 22 face-to-face semi-structured interviews supplemented the analysis. Policy triangle policy analysis model was used to guide data analysis. Results Our comprehensive overview of changes in the medical pricing system provides valuable lessons for major stakeholders. Most changes were implemented in a sporadic, inadequate, and a non-evidence-based manner. Disparities in prices between public and private sectors make tariffs setting a contentious issue in Iran. Lack of clarity in pricing health care services makes negotiations between various stakeholders difficult and can potentially become a source of a corrupt income. Such clarity can be achieved by using adequate and technically sound pricing. Technical aspects of pricing health services should be separated from the political negotiations over the overall payment to the medical professionals. Transparency regarding a conflict of interest and establishing punitive measures against those violating the rules could help improving trust in the doctor-patient relationship. Conclusion Evidence-based changes in medical pricing policies can help striking the right balance in the health care services provision process. A sensitive application of policy models can offer significant insights into the nature of medical price policy setting and highlight existing constraints and opportunities.

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“…Variations in market power appear, to at least some extent, to underlie variations in health care payments (Dunn andShapiro, 2012, 2014;Cooper, Craig, Gaynor, and Van Reenen, 2015). Additional issues, including intransparency and the pervasiveness of public-private payment linkages, raise further questions about the efficiency of private health care payment setting (Batty and Ippolito, 2017;Brill, 2013;Clemens, Gottlieb, and Molnar, 2015). At the same time, mandated price consistency erodes incentives for providing services with high quality on dimensions that are difficult for regulators to measure, or in which they take no interest (Pauly and Town, 2012).…”

Section: All-payer Rate Setting and Uncompensated Carementioning

confidence: 99%

“…2 This reflects concerns about prices faced by the uninsured, which can be unknown to the consumer (and the supplying physician, for that matter) when care provision decisions are made (Batty and Ippolito, 2017;Brill, 2013). Others note that mandated price consistency erodes incentives for providing services with high quality on dimensions that are difficult to measure or otherwise difficult to reimburse (Pauly and Town, 2012).…”

mentioning

confidence: 99%

Uncompensated Care and the Collapse of Hospital Payment Regulation: An Illustration of the Tinbergen Rule

Clemens

Ippolito

2019

Public Finance Review

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The primary objective of “all-payer” rate setting—regulatory regimes through which states set hospital payment rates for all insurers—was to control costs through consistent, centrally regulated payments. These regimes were often linked, however, to an ancillary goal of financing care for the uninsured. We show that the surcharge mechanism used to achieve this secondary objective decreased the stability of these payment regimes. This instability reflected a feedback loop from surcharge rates to insurance coverage and back to the quantities of uncompensated care in need of financing. Instability was exacerbated when Health Maintenance Organizations were exempted from surcharge collections, creating a regulatory arbitrage opportunity. Legal challenges connected to the incidence of uncompensated care surcharges contributed to the abandonment of all-payer rate regulation by several states. These developments illustrate the wisdom of the Tinbergen Rule, which recommends that independent policy objectives be met with independent policy instruments.

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Financial Incentives, Hospital Care, and Health Outcomes: Evidence from Fair Pricing Laws

Cited by 14 publications

References 29 publications

Setting Health Care Services Tariffs in Iran: Half a Century Quest for a Window of Opportunity

Setting Health Care Services Tariffs in Iran: Half a Century Quest for a Window of Opportunity

Setting Health Care Services Tariffs in Iran: Half a Century Quest for a Window of Opportunity

Uncompensated Care and the Collapse of Hospital Payment Regulation: An Illustration of the Tinbergen Rule

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