Volume 21, Number 3 (Summer) 1986
Frank, Richard G., and Judith R. Lave. 1986. "The Effect of Benefit Design on the Length of Stay of Medicaid Psychiatric Patients." Journal of Human Resources 21(3):321-337.
This paper examines the factors affecting the length of stay of Medicaid psychiatric patients with a model of supply responses to different patient, environmental, and regulatory characteristics. The results indicate that providers respond to limitations in both coverage and reimbursement. Treatment of psychiatric patients is found to respond strongly to financial incentives, suggesting that in any study of the length of stay of psychiatric patients, the structure of their insurance coverage must be considered. This finding makes it difficult to infer medically appropriate patterns of care from observed length-of-stay data.
Frank is an assistant professor of health policy and management at the Johns Hopkins University and Lave is a professor of health economics at the University of Pittsburgh. The authors are grateful to Jon Christianson, Randall Ellis, Lester Lave, H. C. Schulberg, Thomas McGuire, an anonymous referee, and members of the NIMH economics seminar for useful comments and discussion. Harry Sherick and Lora Portone provided able computing assistance. This research was supported by Grant MH5-33031 from the National Institute of Mental Health to the Western Psychiatric Institute and Clinic of the University of Pittsburgh.
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