title: Price adjustment in the hospital sector: how should the NHS discriminate between providers. A comment on Miraldo, Siciliani and Street.
abstract: Miraldo et al. (2011) have analyzed the price adjustment policy of a payer implementing a Prospective Payment System in the hospital sector in the presence of exogenous cost differences when no lump-sum transfers are allowed. They focus on deriving conditions for the price adjustment being positive. In this paper, using a result of Miraldo et al., we emphasize whether the price adjustment is larger or smaller than the marginal cost. We show how the discrimination operates against either the low-cost or the high-cost hospitals according to the value of the elasticity of the additional marginal cost with respect to the quantity of services.
authors.affiliation: CRESE, University of Franche Comte, 45 D Avenue de l'observatoire, 25030 Besancon Cedex, France. michel.mougeot@univ-fcomte.fr
authors.forename: Michel
authors.initials: M
authors.lastname: Mougeot
authors.forename: Florence
authors.initials: F
authors.lastname: Naegelen
mesh_terms: D004469:Economics, Hospital; D019981:Health Care Sector / Q000191:economics*; D006801:Humans