Data envelopment analysis based bonus payments. Theory and application to inpatient care in the German state of Saxony-Anhalt.
This contribution proposes a reimbursement scheme combining yardstick competition and data envelopment analysis (DEA). The scheme reimburses incurred cost while offering a bonus for resource savings relative to a DEA-based cost norm, providing firms with an incentive to minimize production cost. The individual yardsticks are as close as possible to the actual cost levels, minimizing informational rents of firms. The proposed reimbursement scheme is applied to the hospital sector in Saxony-Anhalt based on data collected in 1999. The results indicate low regulation costs together with potentially large cost reductions due to the incentive structure of the reimbursement scheme.
Felder
Stefan
S
Institute of Social Medicine and Health Economics, Otto-von-Guericke University, Magdeburg, Germany. Stefan.Felder@ismhe.de
Schmitt
Horst
H
D005858:Germany; D017721:Hospital Costs; D006760:Hospitalization / Q000191:economics*; D006801:Humans; D007297:Inpatients; D018803:Models, Economic; D012051:Reimbursement Mechanisms