Journal of Finance and Economics

Journal of Finance and Economics

ISSN: 2291-4951 (Print)    ISSN: 2291-496X (Online)

Volume 4 (2016), No. 3, Pages 32-43

DOI: 10.12735/jfe.v4n3p32

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Creaming and Dumping: Who on Whom?

Karolina Socha-Dietrich1  Peter Zweifel2 

1Centre of Health Economics Research (COHERE), Department of Business and Economics, University of Southern Denmark
2Professor Emeritus, Department of Economics, University of Zurich, Switzerland

URL: http://dx.doi.org/10.12735/jfe.v4n3p32

To Cite this Article     Article Views: 526     Downloads: 257  Since deposited on 2016-09-28

Abstract

In several countries, some healthcare providers combine public service with practice in their own facilities (dual-job practitioners). According to the existing literature, they are viewed as cream-skimming profitable (low-severity) public patients to the benefit of private practice, causing cost of treatment in the public sector to increase. If true, this is particularly problematic when public provider payment is prospective. However, two facts seem to be neglected. First, cream skimming involves effort and thus does not occur in all circumstances. Second, public providers might have an incentive to select patients too, resulting in dumping of the least profitable (high-severity) patients on the private sector. Thus, average cost of treatment in public hospitals does not have to increase, and might even decrease. This paper derives the conditions under which both creaming and dumping are predicted to occur.

JEL Classifications: I11, I18

Keywords: creaming, dumping, waiting lists, public service, dual practice

To Cite this Article: Socha-Dietrich, K., & Zweifel, P. (2016). Creaming and dumping: Who on whom? Journal of Finance and Economics, 4(3), 32-43. http://dx.doi.org/10.12735/jfe.v4n3p32

Copyright © K. Socha-Dietrich & P. Zweifel

Creative Commons License
This article is published under license to Science and Education Centre of North America. This is an Open Access article distributed under the terms of the Creative Commons Attribution 4.0 International License.

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Creaming and Dumping: Who on Whom?
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