Now showing 1 - 3 of 3
  • Publication
    Hospital Efficiency and Consultants’ Private Practices: Analysing the Impact of a Voluntary Reform
    (University College Dublin. School of Economics, 2023-02)
    This paper explores the effectiveness of the voluntary reform. It studies a voluntary healthcare reform that was implemented in Ireland in 2008. The analysis is conducted using a theoretical model and empirical evidence. In 2008, in the hope to reduce waiting lists, new contracts were issued which limited the proportion of private patients that consultants could treat while and compensating them with a higher fixed salary. This new contract was optional for consultants hired before 2008. It was compulsory for newly hired consultants. The theoretical model establishes that this reform reduced the overall number of treated patients because the restriction on private practices disincentivises consultants to attend to more patients. A difference-in-differences approach is then employed where inpatients entering through the Emergency Department are considered as the control group. I use micro-level data to access the impact on the Length of Stay (LOS) and control patients’ characteristics and medication conditions. Using Little’ Law, I establish that the LOS is negatively correlated with the number of admissions. The empirical results also show a 0.28-day increase in the LOS for public patients, which suggests that the 2008 voluntary contract reform led to unexpected adverse impacts and may fail to address the waiting list issue.
  • Publication
    An Analysis of a Rural Hospital’s Investment Decision under Different Payment Systems
    (University College Dublin. School of Economics, 2023-01)
    Healthcare payment systems influence to a great extent the hospitals’ investment decision and thereby, their ability to treat patients. A payment system is optimal provided it incentivises hospitals to undertake an investment level that is appropriate, when considering treatment costs, patients’ welfare and the possible externalities generated. In this paper I focus on a hospital in a rural community where the frequency of utilisation of expensive equipment is possible low, and where patients may incur transfer costs. Considering both, a rural and an urban hospital, I identify the first-best investment level of a rural hospital and compare it with the investment levels arising from two payment systems: The Fee-for-service (FFS) system and the Diagnosis-Related Groups (DRG) system. Under the FFS system, the investment only depends on the characteristics of the rural hospital while it depends on characteristics of both hospitals under the DRG system. I show that the DRG performs better than the FFS system when the rural hospital has a lower treatment cost than the urban hospital. When the rural hospital has a higher cost, the FFS system is superior when the HA intends to motivate investment. Lastly, I show that incorporating location factor into the DRG pricing formula to incentivise the rural hospital is effective only when it has a higher treatment cost.
  • Publication
    Addressing Private Practice in Public Hospitals
    (University College Dublin. School of Economics, 2020-05) ;
    This paper proposes a theoretical analysis of the private provision of care within public hospitals and assesses its impact on the quality and cost of healthcare. We also capture this policy’s impact on the number of outpatients that are seen and the number that are cured. We show that the private income gathered by consultants engaged in dual practice has a negative impact on the level of care being provided as it incentivises consultants to focus on the number of patients seen. However, the private fees generate lower healthcare costs. Hence the removal of private practice in public hospitals is only optimal when the benefit associated with curing patients is large enough. The impact on waiting lists is ambiguous. Considering that consultants may differ in their ability, we show that the optimal contracts enable senior doctors (with more experience) to get a greater private income than junior doctors when discrimination between senior and junior physicians is allowed. When discrimination is not allowed, it is optimal to offer a uniform contract. Proposing distinct contracts, as currently done in Ireland, increases healthcare costs due to incentive compatibility issues.