Impact of the new Austrian inpatient payment strategy on hospital behavior: A system-dynamics model

In Austria, a new performance-oriented reimbursement system for inpatients was introduced in 1997. The system is aimed at implementing a more effective and efficient health care payment strategy that will contain costs. It reverses reimbursement on a per inpatient per day basis resulting in a cost explosion that has exceeded the limits of the overall health care budget. This paper presents a strategic system-dynamics model that analyzes the impact of the new payment system on hospitals' reimbursement maximization behavior. Empirical findings support the results of our model's ability to determine future adaptations of the system.