Seminar Vol. 198

Title: Upcoding Under Diagnosis-based Price: Evidence from China Public Health Insurance Programs

Speaker: Xiaolu Zhou, Xiamen University

Time: November 22th, 2019  13:30-15:00

Venue: Conference Room 106B, IESR, Zhonghui Building (College of Economics)

About the speaker:

Xiaolu Zhou is an Assistant Professor in the School of Economics and Wang Yanan Institute for Studies in Economics at Xiamen University. She graduated from the Department of Economics at Pennsylvania State University in 2017. Her research fields are Industrial Organization and Applied Microeconomics.  

Abstract:

This paper studies hospitals' upcoding and its implication for the cost-effectiveness of diagnosis-based prospective payment system (PPS). We focus on a payment reform in the public health insurance for urban citizens in city S in China. The reform introduced a system with diagnosis-specific scores, and one year after the introduction, it changed the scores for 55% diagnoses. Using the individual-level inpatient discharge records, we compare the variations in diagnosis scores before and after the reform for individuals in city S versus that for individuals in a neighborhood city N. Results suggest that hospitals tend to upcode patients' diagnosis score by 5.8%-8% after the introduction of diagnosis-based PPS, and patients are less likely to be coded to diagnoses with a score decrease. This significantly reduces the cost-effectiveness of diagnosis-based PPS.