Cream skimming and hospital transfers in a mixed public-private system

Abstract

The increasing prominence of the private sector in health care provision has generated considerable interest in understanding its implications on quality and cost. This paper investigates the phenomenon of cream skimming in a mixed public-private hospital setting using the novel approach of analysing hospital transfers. We analyse hospital administrative data of patients with ischemic heart disease from the state of Victoria, Australia. The data set contains approximately 1.77 million admission episodes in 309 hospitals, of which 132 are public hospitals, and 177 private hospitals. We ask if patients transferred between public and private hospitals differ systematically in the severity and c..