The Impact of Hospital Payment Schemes on Healthcare and Mortality: Evidence from Hospital Payment Reforms in OECD Countries.

In this study, aggregate-level panel data from 20 Organization for Economic Cooperation and Development countries over three decades (1980-2009) were used to investigate the impact of hospital payment reforms on healthcare output and mortality. Hospital payment schemes were classified as fixed-budget (i.e. not directly based on activities), fee-for-service (FFS) or patient-based payment (PBP) schemes. The data were analysed using a difference-in-difference model that allows for a structural change in outcomes due to payment reform. The results suggest that FFS schemes increase the growth rate of healthcare output, whereas PBP schemes positively affect life expectancy at age 65 years. However, these results should be interpreted with caution, as results are sensitive to model specification.