Times of change in complex environments - Evaluating hospital co-payments in Palestine refugee camps

Abstract

Abstract We measure the impact introducing a of 10% co-payment component on hospitalisation costs for Palestine refugees from Lebanon in public and private hospitals. This ex-post analysis provides a detailed insight on the direction and magnitude of the policy impact in terms of demand and supply for healthcare. The data was collected by the United Nations Relief and Works Agency for Palestine Refugees in the Near East and include episode level information from all public, private and Red Crescent Hospitals in Lebanon, between April 2016 and October 2017. This is a complete population episode level dataset with information from before and after the policy change. We use multinomial logit, negative binomial and linear models to estimate the policy impact on demand by type of hospital, average length of stay and treatment costs for the patient and the provider. After the new policy was implemented patients were 18% more likely to choose a (free-of-charge) PRCS hospital for secondary care, instead of a Private or Public hospital, where the co-payment was introduced. This impact was stronger for episodes with longer stays, which are also the more severe and more expensive cases. Average length of stay decreased in general for all hospitals and we could not find a statistically significant impact on costs for the provider nor the patient. We find evidence that the introduction of co-payments is hospital costs led to a shift in demand, but it is not clear to what extent the hospitals receiving this demand shift were prepared for having more patients than before, also because these are typically of less quality then the others. Regarding costs, there is no evidence that the provider managed to contain costs with the new policy, as the demand adapted to the changes. Our findings provide important information on hospitalisation expenses and the consequences of a policy change from a lessons learned perspective that should be taken into account for future policy decision making. Key messages We show that in a context of poverty, the introduction of payment for specific hospital types can be efficient for shifting demand, but has doubtable impact on costs containment for the provider. The co-payment policy can have a negative impact on patients' health since after its implementation demand increased at free-of-charge hospitals, which typically have less resources to treat patients.