The Spillover Effects of a City-Wide Global Budget and Case-Based Payment Reform on Inbound Non-Resident Patients

Area of Science:

• Health Economics
• Healthcare Policy
• Public Health

Background:

• City-wide payment reforms can create spillover effects for non-resident patients.
• Understanding these effects is crucial for equitable healthcare delivery and policy design.

Purpose of the Study:

• To investigate the impact of the DIP reform (global budget and case-based payment) on non-resident patients' hospital charges.
• To assess whether the reform affected care quality for this patient group.

Main Methods:

• Developed a theoretical model to hypothesize effects based on deviation costs.
• Employed a difference-in-differences approach using hospital discharge records.
• Compared outcomes for non-resident patients in the reform city versus non-reform cities.

Main Results:

• The DIP reform led to significant reductions in total hospital charges for non-resident patients.
• Care quality, measured by readmission rates, remained unaffected.
• High-cost hospitals experienced larger charge reductions than low-cost hospitals.

Conclusions:

• City-wide payment reforms can reduce healthcare costs for non-resident populations.
• Heterogeneous impacts on hospitals necessitate careful management for equitable care.
• The findings have implications for designing and implementing healthcare payment reforms.