Philippine E-Journals

An Essay on Health Economics: Hospital Cost-Shifting and the Provision of Uncompensated Care

Teresita R. Ramirez

Discipline: Economics

 

Abstract:

This paper attempts to model the output and pricing behavior of nonprofit hospitals under a prospective payment system and examines the effect of this behavior on the provision of uncompensated hospital care.' A utility maximizing framework is employed to derive and evaluate comparative statics derivatives describing the effects of a reduction in government reimbursement rates on prices charged by hospitals to private patients and on the quantity of uncompensated care.