Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
We study how changes in Diagnosis‐Related Group price regulation affect hospital behaviour in quasi‐markets with exclusive provision by public hospitals. Exploiting a quasi‐natural experiment, we use a difference‐in‐differences approach to test whether public hospitals respond to an exogenous change in Diagnosis‐Related Group tariffs by increasing C‐section rates and/or by upcoding. Controlling for a detailed set of mother characteristics, we find that price changes did not affect the probability of a C‐section. We do however find evidence of upcoding: Conditional on the birth delivery method (either a C‐section or a vaginal delivery), public hospitals experiencing the largest price change exhibit a higher probability of treating patients coded as complicated. This finding suggests that even public hospitals may be sensitive to market incentives.