In a paper published by Ma (1994) it was argued that the prospective payment system in the hospital industry was superior to the cost based reimbursement system to achieve both cost reduction and quality improvement ob jectives. In the analysis, it was assumed that quality and costs decisions...

Hospital financing systems determine ma jor decisions made by physicians and managers within hospitals. This paper examines the impact of the transition toward an activity-based reimburse- ment system that has emerged in most OCDE countries. We consider two initial situations, one for a private...

The impact of the transition from a global budget payment to an activity-based financing system on public hospitals financial equilibrium is analyzed in this paper. To do so, we develop a theoretical model where patients? demand is related to joint decisions made by hospital managers and...