Hospital responses to price shocks under the prospective payment system
利用2005年Medicare支付区域定义变更带来的外生价格冲击，研究发现医院在价格上升时并未增加服务量或提升质量，反而更倾向于将患者归入更高支付等级的诊断组，表明高价未必带来优质服务。
Under the prospective payment system (PPS), hospitals receive a bundled payment for an entire episode of treatment based on diagnosis-related groups (DRG). Although there is ample evidence regarding the impact of the introduction of the PPS, there is little research on the effects of the ensuing changes in payment levels under the PPS. In 2005, the Medicare PPS changed its definition of payment areas from the Metropolitan Statistical Areas to the Core-Based Statistical Areas, generating substantial area-specific price shocks. Using these exogenous price variations, this study examines hospital responses to price changes under the PPS. The results demonstrate that, while the average payment amount significantly increases in the affected areas, no parallel trend is observed in admission volume, treatment intensity, and quality of services. Conversely, hospitals facing a price increase are more liable to the perverse incentives that the PPS is known to encourage, namely, selecting or shifting patients into higher-paying DRGs. These results suggest that paying a higher price for a given service may not induce hospitals to offer services of better quality, but can rather prompt even higher payments through other behavioral responses.