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Marginal revenue and length of stay in inpatient psychiatry

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Abstract

This study examines the changes in marginal revenue during psychiatric inpatient stays in a large Swiss psychiatric hospital after the introduction of a mixed reimbursement system with tariff rates that vary over length of stay. A discrete time duration model with a difference-in-difference specification and time-varying coefficients is estimated to assess variations in policy effects over length of stay. Among patients whose costs are fully reimbursed by the mixed scheme, the model demonstrates a significant effect of marginal revenue on length of stay. No significant policy effects are found among patients for whom only health insurance rates are delivered as mixed tariffs and government contributions are made retrospectively. The results indicate that marginal revenue can affect length of stay in inpatient psychiatry facilities, but that the reduction in marginal revenue must be sufficiently large.

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Notes

  1. Between 2008 and 2011, the following cantons had reimbursement agreements with the canton of Zurich that allowed their residents to be treated in Zurich hospitals: Appenzell-Innerhoden, Appenzell-Auserrhoden, Glarus, Graubünden, St. Gallen, Schaffhausen, Thurgau, and Zug. Patients from other cantons or from abroad had to pay the government share themselves.

  2. According to staff of the health administration of the canton of Zurich the intervention hospital was selected because it was a state run hospital and because it treated a typical patient population. The comparison group also included state-run hospitals.

  3. As an example, a stay of 20 days in the intervention hospital was reimbursed by health insurance with \(20 \times 309=6180\) in 2008, and \(3062 + 5 \times 356 + 15 \times 217 = 8097\) in 2009.

  4. An episode of a non-Zurich resident of 36 days was reimbursed by health insurance and the government with \(36\times 803=28{,}908\) in 2008, and with \(7720 + 5\times 897 + 31 \times 546 = 29{,}131\) in 2009. The revenue from health insurance for a stay of a Zurich resident of 40 days was \(40 \times 309 = 12{,}360\) in 2008, and \(3062 + 5 \times 356 + 35 \times 217 = 12{,}437\) in 2009.

  5. The CGI rating is an overall assessment of symptom severity by the treating physician; its scores range from 1 (normal, not at all ill) to 7 (extremely ill).

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Acknowledgments

I am very grateful to Claude Jeanrenaud, Per Johansson, and Simon Wieser for their support and guidance. Carsten Colombier, Peter Zweifel, Maarten Lindeboom, Jürgen Maurer, Alberto Holly, Mark Dusheiko, and other participants of the Swiss Health Economics Workshop and the SSPH+ PhD seminar provided useful comments. I also thank the two anonymous reviewers whose comments helped improve and clarify this manuscript. All errors are my own.

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  1. Institute of Economic Research, University of Neuchâtel, Rue A.-L. Breguet 2, Neuchâtel, 2000, Switzerland

    Mark Pletscher

  2. Winterthur Institute of Health Economics, Zurich University of Applied Sciences, Gertrudstrasse 15, Winterthur, 8400, Switzerland

    Mark Pletscher

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Correspondence to Mark Pletscher.

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Pletscher, M. Marginal revenue and length of stay in inpatient psychiatry. Eur J Health Econ 17, 897–910 (2016). https://doi.org/10.1007/s10198-015-0735-4

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