Description:

Presenter: Yoshimasa Katayama

Title: Readmission Penalty under Nonlinear Payment Schedules: Evidence from Japan

Abstract: I study how hospitals respond to financial incentives. In Japan, the per diem payment is designed to decrease as the length of stay increases to incentivize early discharge. To discourage repeated discharges and readmissions, readmissions immediately after discharge have been penalized. Exploiting changes in readmission penalties, I find that overall readmission rates remain unchanged as hospitals change the timing of readmissions. All of the changes in readmission timing are driven by patients whose health status is unlikely to be affected. Among those who would be affected, immediate post-discharge readmissions decrease without such delays, which I interpret as a quality improvement.