Is it good to be too light? Birth weight thresholds in hospital reimbursement systems

Abstract

Birth weight manipulation has been documented in per-case hospital reimbursement systems, in which hospitals receive more money for otherwise equal newborns with birth weight just below compared to just above specific birth weight thresholds. As hospitals receive more money for cases with weight below the thresholds, having a (reported) weight below a threshold could benefit the newborn. Also, these reimbursement thresholds overlap with diagnostic thresholds that have been shown to affect the quantity and quality of care that newborns receive. Based on the universe of hospital births in Germany from the years 2005-2011, we investigate whether weight below reimbursement relevant thresholds triggers different quantity and quality of care. We find that this is not the case, suggesting that hospitals' financial incentives with respect to birth weight do not directly impact the care that newborns receive.

Dishonesty in health care practice: A behavioral experiment on upcoding in neonatology

“…We thus are able to analyze whether subjects-in order to receive the maximum 8 We are aware that the payment assumption somewhat abstracts from the real world. 9 This assumption seems reasonable, in light of recent empirical evidence by, for example, Reif et al (2018), which indicates that financial incentives related to the birth weight thresholds do not directly impact the medical care that newborns receive. However, it seems reasonable to assume that they at least indirectly benefit from upcoding.…”

“…In credence goods markets, goods and services are provided by an expert who has an informational advantage about the quality a consumer needs. This assumption is motivated by recent empirical findings that indicate that upcoding in neonatal care does not affect the medical service provision (Jürges & Köberlein, 2015;Reif et al, 2018). In a health care market with regulated prices, physicians act as experts and insured patients seek medical care.…”

“…As documented in Jürges and Köberlein (2015) and Reif et al (2018), hospitals appear to react by manipulating the recorded birth weight and by reclassifying newborns to better paying DRGs. Although the true treatment costs of each newborn remain the same, reimbursement will jump from lower-than-expected treatment costs to higher-than-expected treatment costs.…”

“…Early studies have already pointed to the unintended consequences of introducing DRG-based payment systems, 4 namely, the attempt by hospitals to increase revenues through fraudulent coding practices (e.g., Barros & Braun, 2017;Carter et al, 1990;Dafny, 2005;Januleviciute, Askildsen, Kaarboe, Siciliani, & Sutton, 2016;Silverman & Skinner, 2004). Shigeoka and Fushimi (2014), Jürges and Köberlein (2015), and Reif, Wichert, and Wuppermann (2018) report evidence for DRG upcoding in neonatal care in Japan and Germany. Common to all these studies is that evidence is provided at an aggregate level.…”

Losing body weight for money: How provider‐side financial incentives cause weight loss in Swiss low‐birth‐weight newborns

“…For example, a newborn might receive more or better treatment because more financial resources become available through upcoding. Recent research by Reif et al (2018) has indicated that this is not the case, but we believe that further research in this direction is needed. Understanding both costs and benefits of upcoding is required for a holistic economic assessment.…”