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Discussion Papers No. 889

Spending the night? Provider incentives, capacity constraints and patient outcomes

Healthcare providers’ response to payment incentives may have consequences for both fiscal spending and patient health. This paper studies the effects of a change in the payment scheme for hospitals in Norway.

In 2010, payments for patients discharged on the day of admission were substantially decreased, while payments for stays lasting longer than one day were increased. This gave hospitals incentives to shift patients from one-day stays to two-day stays, or to decrease the admission of one-day stays. I study hospital responses by exploiting the variable size of price changes across diagnoses in a difference-in-differences framework. I find no evidence that hospitals respond to price changes, and capacity constraints do not appear to explain this finding. Results imply that the current payment policy yields little scope for policymakers to affect the healthcare spending and treatment choices.

About the publication


Spending the night? Provider incentives, capacity constraints and patient outcomes


Ingrid Huitfeldt

Series and number

Discussion Papers No. 889


Statistisk sentralbyrå


Discussion Papers



Number of pages


About Discussion Papers

Discussion papers comprise research papers intended for international journals and books. A preprint of a Discussion Paper may be longer and more elaborate than a standard journal article as it may include intermediate calculations, background material etc.