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Do hospitals practice cream skimming?

Daniel L Friesner1, Robert Rosenman

  • 1College of Pharmacy, Nursing and Allied Sciences, North Dakota State University, Sudro Hall, Fargo, ND, USA. freisner@jepson.gonzaga.edu

Health Services Management Research
|February 3, 2009
PubMed
Summary
This summary is machine-generated.

Hospitals may engage in "cream skimming," selecting less sick patients to increase profits, especially under fixed payment systems. A new method reveals this practice exists but doesn't significantly vary by hospital size, profit status, or time.

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Area of Science:

  • Health Services Research
  • Hospital Management
  • Healthcare Economics

Background:

  • 'Cream skimming' involves patient selection based on non-clinical factors to boost provider profitability or reputation.
  • Fixed payment models, such as capitation, incentivize providers to select less ill patients.

Purpose of the Study:

  • To introduce a novel methodology for quantifying hospital 'cream skimming'.
  • To assess the relationship between patient illness severity and a hospital's productive efficiency gains.
  • To examine variations in cream skimming based on hospital characteristics and time.

Main Methods:

  • Development of a new quantitative approach to measure 'cream skimming' in hospitals.
  • Analysis of a panel dataset of hospitals in Washington state.
  • Statistical examination of cream skimming prevalence across different hospital sizes, profit statuses, and over time.

Main Results:

  • Evidence confirms that hospitals do practice 'cream skimming' by selecting less ill patients.
  • The study found minimal variation in cream skimming related to hospital size.
  • No significant differences in cream skimming were observed based on hospital profit status or over the study period.

Conclusions:

  • Hospitals utilize 'cream skimming' as a strategy, particularly under fixed payment schemes.
  • The developed methodology offers a tool to measure this phenomenon and its impact on efficiency.
  • Cream skimming practices appear consistent across various hospital types and do not significantly change over time.