title: Two-part payments for the reimbursement of investments in health technologies.
abstract: The paper studies the impact of alternative reimbursement systems on two provider decisions: whether to adopt a technology whose provision requires a sunk investment cost and how many patients to treat with it. Using a simple economic model we show that the optimal pricing policy involves a two-part payment: a price equal to the marginal cost of the patient whose benefit of treatment equals the cost of provision, and a separate payment for the partial reimbursement of capital costs. Departures from this scheme, which are frequent in DRG tariff systems designed around the world, lead to a trade-off between the objective of making effective technologies available to patients and the need to ensure appropriateness in use.
authors.affiliation: Department of Economics and Management, University of Brescia, Italy.
authors.forename: Rosella
authors.initials: R
authors.lastname: Levaggi
authors.affiliation: Department of Economics, University of Padova and FEEM, Italy.
authors.forename: Michele
authors.initials: M
authors.lastname: Moretto
authors.affiliation: Department of Economics, University of Verona, Italy. Electronic address: paolo.pertile@univr.it.
authors.forename: Paolo
authors.initials: P
authors.lastname: Pertile
mesh_terms: D020811:Biomedical Technology / Q000191:economics* / Q000458:organization & administration; D017048:Health Care Costs / Q000706:statistics & numerical data; D006801:Humans; D018803:Models, Economic; D012051:Reimbursement Mechanisms / Q000458:organization & administration*
keywords: Appropriateness; Capital cost; DRG; Health care investment; Prospective payment