Findings from Stanford University Reveals New Findings on Health Economics (Why Don’t Commercial Health Plans Use Prospective Payment?)

2019 NOV 21 (NewsRx) -- By a News Reporter-Staff News Editor at Health Policy and Law Daily -- Current study results on Economics - Health Economics have been published. According to news originating from Stanford, California, by NewsRx correspondents, research stated, “One of the key terms in contracts between hospitals and insurers is how the parties apportion the financial risk of treating unexpectedly costly patients. ‘Prospective’ payment contracts give hospitals a lump-sum amount, depending on the medical condition of the patient, with limited adjustment for the level of services provided.”

Our news journalists obtained a quote from the research from Stanford University, “We use data from the Medicare Prospective Payment System and commercial insurance plans covering the nonelderly through the Health Care Cost Institute to measure the extent of prospective payment in 303 metropolitan statistical areas during 2008-12. We find that the extent of prospective payment in commercial insurance is lower and more variable across hospitals and geographic areas than in Medicare.”

According to the news editors, the research concluded: “In addition, we find that the differences in prospective payment across hospitals is positively associated with hospital market competitiveness, the share of admissions paid by commercial managed care plans, and the share paid by the Medicare Prospective Payment System.”

For more information on this research see: Why Don’t Commercial Health Plans Use Prospective Payment? American Journal of Health Economics, 2019;5(4):465-480. American Journal of Health Economics can be contacted at: Mit Press, One Rogers St, Cambridge, MA 02142-1209, USA.

The news correspondents report that additional information may be obtained from M.K. Bundorf, Stanford University, Stanford, CA 94305, United States. Additional authors for this research include L. Baker, D.P. Kessler and A. Devlin.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1162/ajhe_a_00127. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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