Title: Intensity response of Thai public hospitals to payment system change

Authors: Watchai Charunwatthana; Siripen Supakankunti

Addresses: Faculty of Economics, Chulalongkorn University, Phayathai Road, Pathumwan, Bangkok 10330, Thailand ' Faculty of Economics, Chulalongkorn University, Phayathai Road, Pathumwan, Bangkok 10330, Thailand

Abstract: Hospital responses on service intensity could be affected by payment system change from fee-for-service to DRG-based basis for CSMBS patients. This study aims: 1) to examine overall intensity effect of payment change on the average length of stay (LOS); 2) to decompose overall effect into the moral hazard, selection and practice-style effects. Descriptive statistics and regression technique were conducted. The findings showed negative intensity response to policy changes through a decrease in the average LOS for CSMBS patients by 0.23 days in aggregate and at the regional, general and community hospitals by 0.30, 0.29 and 0.15 days respectively. The regression analysis revealed the negative moral hazard effects at the regional and general hospitals and positive selection effects at all levels of hospitals. There is also positive practice-style effect. It implies that Thai public hospitals behave according to Hodgkin and McGuire's model.

Keywords: intensity response; public hospitals; payment systems; length of stay; LOS; fee-for-service; FFS; diagnosis-related group; DRG; moral hazard; selection effect; practice-style effect; Thailand; payment changes; healthcare services; hospital responses; policy changes; Civil Servant Medical Benefit System; CSMBS patients; general hospitals; regional hospitals.

DOI: 10.1504/IJEPEE.2014.066626

International Journal of Economic Policy in Emerging Economies, 2014 Vol.7 No.4, pp.335 - 345

Available online: 29 Dec 2014 *

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