TY  - JOUR
AU  - Salkever,David S.
AU  - Steinwachs,Donald M.
AU  - Rupp,Agnes
TI  - Hospital Cost and Efficiency Under Per Service and Per Case Payment in Maryland:  A Tale of the Carrot and the Stick
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 1633
PY  - 1986
Y2  - August 1986
UR  - http://www.nber.org/papers/w1633
L1  - http://www.nber.org/papers/w1633.pdf
N1  - Author contact info:
David S. Salkever
UMBC
Department of Public Policy
1000 Hilltop Circle, Public Policy 418
Baltimore, MD  21250
Tel: 410/455-8459
Fax: 410-455-8066
E-Mail: salkever@umbc.edu
M2  - featured in NBER digest on 1985-07-01
AB  - The simultaneous operation of per case and per servicepayment systems in Maryland, and the varying levels of stringency used in setting per case rates allows comparison of effects of differing incentive structures on hospital costs. This paper presents such a comparison with 1977-1981 data. Cost per case and total cost regressions show evidence of lower costs only when per case payment limits are very stringent. Positive net revenue incentives appear insufficient to induce reductions in length of stay and in ancillary services use. Our results suggest these changes in medical practice patterns are more likely under the threat of financial losses.
ER  -