An Empirical Study on the Determinants of Cost Structure and Capitation Participation for California Hospitals

• Main Authors: Yi-Hung Ou Yang, 歐陽宜宏
• Other Authors: Shuen-Zen Liu
• Format: Others
• Language: en_US
• Published: 2001
• Online Access: http://ndltd.ncl.edu.tw/handle/87467492675956509291

碩士 === 國立臺灣大學 === 會計學研究所 === 89 === This study examines factors influencing operating costs and determinants of capitation participation for California hospitals using annual financial data during 1997-1999, obtained from the California’s Office of Statewide Health Planning and Development (OSHPD). Capitation has now been increasing its importance in managed care contracts. It is expected to encourage the providers to better manage health care delivery and trim unnecessary utilization and cost. Success under capitation depends upon the ability of hospital to lower hospital use and reduce inefficient costs, and therefore changes the provider’s behavior from revenue to cost orientation. Capitation should consequently affect hospital costs and brings changes in behaviors. Therefore, it is included in this hospital cost study to account for its effects on cost containment, and besides explored the determinants of hospital capitation participation. According to the empirical results, capitation does not bring in overwhelming pressure on cost containment as predicted, but, instead, increases the hospital costs maybe owing to the extra requirements of performing detail work at the initial stage. Finance is a main concern of capitation participation for a hospital. The stress, however, is not on the expense dimension but the consideration of extra revenue inflow in present time. The empirical results reveals that the size and scale effect of a large patient group is critical to the hospital’s decision on capitation participation. In normal circumstances, the patient amount increases with hospital size and scale. Although hospital costs increase with the size and scale, the additional increased capitation revenue should raise far rapidly then the cost expansion, supported by the finding of a positive relation between the size measures and capitation. The teaching hospitals seem to be well operated in California for their teaching status does not increase the hospital costs, and thus might not affect the decision on capitation participation. On the utilization dimension, hospitals exerting capitation, on average, have relatively shorter average length of stay but more outpatient visits. Further, combined with the cost determinant results, the average length of stay is not an important factor affecting the hospital costs, which supports Carey’s finding (2000). Therefore, it seems not an efficient and effective way to curtail costs by shortening hospitalization. From the marginal effect results, the hospital classification and attributes show importance above overall marginal effects in hospitals’ capitation participation, such as: the systematic affiliation, small and/or rural status, types of control, and types of care emphasized; these classification may suggest natural constraints or predominance and weakness positions.