Health effects of a ban on late-night alcohol sales.

This paper studies the impact of a ban on late-night off-premise alcohol sales between 10 p.m. and 5 a.m. in Germany. We use three large administrative data sets: (i) German diagnosis related groups-Statistik, (ii) data from a large social health insurance, and (iii) Road Traffic Accident Statistics. Applying difference-in-differences and synthetic-control-group methods, we find that the ban had no effects on alcohol-related road casualties, but significantly reduced alcohol-related hospitalizations (doctor visits) among young people by around 9 (18) percent. The decrease is driven by fewer hospitalizations due to acute alcohol intoxication during the night-when the ban is in place-but not during the day.

Price and income effects of hospital reimbursements.

Health insurance systems in many countries reimburse hospitals through fixed prices based on the diagnosis-related groups (DRGs) of patients. We quantify the effects of price and income changes for the full spectrum of hospital services as average and heterogeneous elasticities of quantities (number of admissions) and quality-related outcomes. For our empirical analysis, we use data on over 160 million hospital admissions, constituting the universe of hospital admissions in Germany between 2005 and 2016. Our identification strategy is based on instruments exploiting a two-year lag in regulatory price setting. The strategy lends itself to a placebo test demonstrating that our instruments do not have substantive anticipatory direct effects. We find that the compensated own-price elasticity of quantity is positive (0.2), while the income elasticity is negative (-0.15). On net, increasing all prices increases costs due to a behavioral response of larger quantities in addition to the mechanical increase.

How do hospitals respond to cross price incentives inherent in diagnosis-related groups systems? The importance of substitution in the market for sepsis conditions.

This study addresses the question of how hospitals respond to the cross price incentives inherent in reimbursements based on diagnosis-related groups (DRG). Unique market-wide administrative data allow to exploit a natural experiment in Germany in which the relative attractiveness of greatly divergent reimbursements for clinically similar patients changes in the market for sepsis conditions on January 1, 2010. This natural experiment provides-unintentionally-extra reimbursements in cases in which hospitals reorganize transfers for deceasing patients to other facilities, alter the time of death, the choice of the condition being chiefly responsible for the hospital admission (primary diagnosis), or the intensity of mechanical ventilation. The differences-in-differences results demonstrate that hospitals primarily alter the primary diagnosis. As the choice of the primary diagnosis is the backbone of the design of modern DRG systems, the findings suggest that payment contracts between hospitals and payers based on modern DRG algorithms may not necessarily improve patient welfare.

Hospital responses to the refinement of reimbursements by treatment intensity in DRG systems.

Many OECD countries have replaced per-diem hospital reimbursement with lump sum payments by diagnosis-related groups. This study analyzes hospital responses to a large-scale refinement of reimbursement practices in Germany on January 1, 2006, in which regulating authorities introduce reimbursements by treatment intensity in the market for stroke disorder. We find that the share of admissions receiving high-intensity treatments jumps by approximately 7 percentage points around the turn of the year. At the same time, a decrease in the average clinical severity of patients receiving these high-intensity treatments reveals that the marginal high-intensity treated patient in 2006 might be less appropriate for high-intensity treatments compared to 2005. We do not find accompanying (short-term) changes in the quality of care, such as decreases in in-hospital mortality.