Abstract
Objective: This empirical study investigates hospital’s incentives in responding to the difference in
reimbursement policies. Specifically, it seeks to identify and analyze possible cross-subsidization across
health schemes within the public hospitals in Thailand.
Methods: This observational study employed a mixed-methods research design. Qualitative
contents were collected from focus-group interviews of 30 hospital administrators in three selected public
hospitals, and content analysis was primarily used to synthesize a mental model of how hospital
administrators making decisions related to the concept of cross-subsidization. Quantitative data analysis
was used to compliment the qualitative contents on the issues of unit-cost difference, difference between
charge and cost, and difference between reimbursement and cost across health schemes.
Results: Content analysis reveals four emerging themes. First, the concept of cross-subsidization
is perceived differently among hospital administrators. Second, payment policies create obstacles to
hospitals’ financial management. Third, organizational factors also create obstacles to hospitals’ financial
management. Lastly, hospitals respond to payment policies of health schemes by various measures. These
findings are supported by quantitative results, which suggest the unit costs and the differences between
reimbursement and cost vary across health schemes after controlled for other patient characteristics.
Nonetheless, no evidence suggests that hospitals cost-shift by increasing prices charged to out-of-pocket
payment patients to compensate for the loss.
Discussions: Despite no strong evidence of cross-subsidization, we found three patterns of
decision-making of hospital administrators related to cross-subsidization, including implementing no
management practices for cross-subsidy, initiating organizational practices to reduce negative financial
impacts, and attempting to negotiate with health schemes on a fair reimbursement rate. Hence, policymakers
should adjust financing policies to adequately pay for health services provided. When evaluating the
impact of any payment policies, policymakers should consider not only an impact to patients of any
particular health scheme, but also an impact to other patients groups within the hospitals. Future studies
should utilize time-series data to determine a causational relationship between payment policies and
cross-subsidization at the hospital level.
