Norwegian priority guidelines: Estimating the distributional implications across age, gender and SES

Objective: Targeting hospital treatment at patients with high priority would seem to be a natural policy response to the growing gap between what can be done and what can be financed in the specialist health care sector. The paper examines the distributionalconsequences of this policy. Method: 450 000 elective patients are allocated to priority groups on the basis of medical guidelines developed by one of the regional health authorities in Norway. Probit models are estimated explaining priority status as a function of age, gender and socioeconomic status. Results: Women and older people are overrepresented among patients with low priority. Conditional on age, women with low priority have lower income and less education than women with high priority. Among men below 50 years, patients with low priority have less education than patients with high priority. Conclusion: Targeting hospital treatment at patients with high priority, though sensible from a pure medical perspective, may have undesirable distributional consequences.Government Policy; Regulation; Public Health

Paying for Performance in Hospitals

A frequent form of pay-for-performance programs increase reimbursement for all services by a certain percentage of the baseline price. We examine how such a ?bonus-for-quality? reimbursement scheme a¤ects the wage contract given to physicians by the hospital management. To this end, we determine the bonus inducing hospitals to incentivize their physicians to meet the quality standard. Additionally, we show that the health care payer has to complement the bonus with a (sometimes negative) block grant. We conclude the paper relating the role of the block grant to recent experiences in health care market.Paying-for-Performance; Quality; Hospital Financing

Paying for Performance in Hospitals

A frequent form of pay-for-performance programs increase reimbursement for all services by a certain percentage of the baseline price. We examine how such a “bonus-for-quality” reimbursement scheme affects the wage contract given to physicians by the hospital management. To this end, we determine the bonus inducing hospitals to incentivize their physicians to meet the quality standard. Additionally, we show that the health care payer has to complement the bonus with a (sometimes negative) block grant. We conclude the paper relating the role of the block grant to recent experiences in the American health care market.Paying-for-Performance; Quality; Hospital Financing

Waiting times and socioeconomic status. Evidence from Norway

We investigate whether socioeconomic status, measured by income and education, affects waiting time when controls for severity and hospital specific conditions are included. We also examine which aspects of the hospital supply (attachment to local hospital, traveling time, or choice of hospital) that matter most for unequal treatment of different socioeconomic groups, and how different behavior responses can create discrimination. The study uses administrative data from all somatic elective inpatient and outpatient hospital stays in Norway. The main results are that we find very little indication of discrimination with regard to income. This result holds both for males and females. We find some indication of discrimination of men with low education as these men have a lower probability of zero waiting time. We also find a pro educational bias for women; as women with only primary education wait about 9 % (13 %) longer than women with upper secondary (tertiary) education.Health Care Markets; Regulations: Public Health

Equilibrium selection in supermodular games with mean payoff technologies

We examine an evolutionary model of equilibrium selection, where all individuals interact with each other, recurrently playing a strictly supermodular game. Individuals play (myopic) best responses to the current population profile, occa- sionally they pick an arbitrary strategy at random. To address the robustness of equilibrium selection in this simultaneous play scenario, we investigate whether different best-response approximations can lead to different long run equilibria.equilibrium selection; supermodular games; simultaneous play; best-response approximation

Is There a Demand Response by Patients in Primary Care?

We test whether a demand response by patients exists in the Norwegian primary care sector. In Norway, physicians are remunerated either by salary or by incentive contract, and we have access to a large data survey that allows us to study the relationship between consumer satisfaction with primary physician services and the way physicians are paid. In addition, we can identify areas (municipalities) where market demand for primary physicians’ services is responsive to effort. When a demand response exists, we expect that patients’ benefit is higher and that patients are more satisfied when visiting a contract physician. As expected, we find very small effects of the salary physician density on reported patient satisfaction in municipalities where market demand is nonresponsive to physicians’ choice of effort. In municipalities with responsive market demand, we find a negative association between salary physician density and patients’ satisfaction with their physician.Physician behavior; Remuneration contracts; Patients’ satisfaction

Imitators and Optimizers in a Changing Environment

We analyze the dynamic interaction between imitation and myopic optimization in an environment of changing marginal payoffs. Focusing on finite irreducible environments, we unfold a trade-off between the degree of interaction and the size of environmental shocks. The optimizer outperforms the imitator if interaction is weak or if shocks are large. We use the example of Cournot duopoly to give economic meaning to this condition. To establish our main result, we rely on continuous state space Markov theory. In particular, it turns out that introducing a stochastic environment with finitely many states suffices to make an otherwise deterministic process ergodic.imitation; optimization; evolution; heterogeneous learning rules; changing environments

Multitasking, Quality and Pay for Performance

We present a model of optimal contracting between a purchaser and a provider of health services when quality has two dimensions. We assume that one dimension of quality is veri?able (dimension 1) and one dimension is not verifiable (dimension 2). We show that the power of the incentive scheme for the verifiable dimension depends critically on the extent to which quality 1 increases or decreases the provider's marginal disutility and the patients' marginal benefit from quality 2 (i.e. substitutability or complementarity). Our main result is that under some circumstances a high-powered incentive scheme can be optimal even when the two quality dimensions are substitutes.quality; altruism; pay for performance.

Distorted Performance Measures and Dynamic Incentives

Incentive contracts must typically be based on performance measures that do not exactly match agents’ true contribution to principals’ objectives. Such misalignment may impose difficulties for effective incentive design. We analyze to what extent implicit dynamic incentives such as career concerns and ratchet effects alleviate or aggravate these problems. Our analysis demonstrates that the interplay between distorted performance measures and implicit incentives implies that career and ratchet effects have real effects, that stronger ratchet effects or more distortion may increase optimal monetary incentives, and that bureaucratic promotion rules may be optimal.Search; Learning; Information and Knowledge; Communication; Belief; Compensation Packages; Payment Methods; Labor Management.

Prioritization and patients' rights: Analysing the effect of a reform in the Norwegian Hospital Sector

The right to equal treatment, irrespective of age, gender, ethnicity, socio-economic status and place of resident, is an important principle for several health care systems. A reform of the Norwegian hospital sector may be used as a relevant experiment for investigating whether centralization of ownership and management structures will lead to more equal prioritization practices over geographical regions. One concern was variation in waiting times across thecountry. The reform was followed up in subsequent years by some other policy initiatives that also aimed at reducing waiting lists. Prioritization practice is measured by a method that takes departure in recommended maximum waiting times from medical guidelines. We merge the information from the guidelines with individual patient data on actual waiting times. This way we can monitor whether each patient in the available register of actual hospital visits has waited shorter or longer than what is considered medically acceptable by the guideline. The results indicate no equalisation between the five new health regions, but we find evidence of more equal prioritization within four of the health regions. Our method of measuring prioritizations allows us to analyse how prioritization practice evolved over time after the reform, thus covering some further initiatives with the same objective. The results indicate that an observed reduction in waiting times after the reform have favoured patients of lower prioritization status, something we interpret as a general worsening of prioritization practices over time.Prioritization; waiting time; hospital reform