Unintended Consequences of Hospital Payment: The Case of Swiss Diagnosis Related Groups

Abstract Background In healthcare systems where hospital tariffs are based on average national length of stay (LOS), deprived patients may be a source of inefficiency for hospitals as deprivation has been shown to be associated with increased LOS. They may also negatively impact hospitals’ financial balance as few hospital payment methods include deprivation. Our objective was to study the impact of deprivation on hospital efficiency and financial balance. Methods A study was carried out using an exhaustive national hospital discharge database. All inpatient stays in mainland France between 2012 and 2014 by children over 28 days and under 18 in hospitals with a paediatric ward were included. Deprivation was estimated with an ecological deprivation index divided into national quintiles. Efficiency was assessed by variations in patients’ LOS compared to different mean national LOS (paediatric LOS, LOS of admissions for a similar condition...). Financial balance was assessed at the admission level through the ratio of production costs and revenues and at the hospital level with the difference between all revenues and production costs for said hospital. Multivariate models assessed the association between those indicators and deprivation. Results 4,124,510 inpatient stays were included. LOS was shorter than national means for less deprived patients and longer for the more deprived, and the difference was higher for diagnosis-related groups (DRGs) that included both adult and paediatric patients compared to paediatric-only DRGs. The multivariate model confirmed those significant associations. Deprivation also had a significant impact on hospitals’ financial balance, especially for hospitals with a percentage of paediatric patients in the two most deprived quintiles between 20% and 60%. Conclusions Measures to reform hospital payment methods must be encouraged to improve resource allocation efficiency and equity in access to good paediatric care. Key messages A reform of hospital funding to better account for deprivation is needed. A modulation of tariffs using an allocation key at the patient level must be considered to mitigate the effect of deprivation. DRGs specific to children should be encouraged to become the norm rather the exception to provide an adequate picture of resources used during admission and therefore an appropriate tariff.

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Expansion of activity-based hospital payment in Israel: evaluation of effects on inpatient activity

European Journal of Public Health ◽

10.1093/eurpub/ckz185.037 ◽

2019 ◽

Vol 29 (Supplement_4) ◽

Author(s):

R Waitzberg ◽

W Quentin ◽

R Maoz-Breuer ◽

R Busse ◽

D Greenberg

Keyword(s):

Fixed Effects ◽

Average Length ◽

Diagnosis Related Groups ◽

Multivariable Analysis ◽

Ordinary Least Squares ◽

Local Version ◽

Number Of Patients ◽

Provider Payment ◽

Hospital Payment ◽

Number Of Discharges

Abstract Background In 2013-14, Israel stepped up the replacement of per-diem payments by Procedure-Related Group (PRG) based hospital payments, a local version of Diagnosis-Related groups (DRGs). PRGs were created for selected procedures in urology, general surgery, gynecology and ophthalmology. We analyzed how did this change affect inpatient activities, measured by the number of discharges, average length of stay (ALoS), and the case-severity Charlson Comorbidity Index (CCI). Methods We investigated the impacts of the PRG-payment reform on 15 procedures. Observations covered groups of inpatients, by age and gender, who underwent these procedures in 2005-2016 at all non-profit hospitals. We examined the effect of the payment change on the number of discharges, ALoS and CCI using a multivariable analysis of Ordinary Least Squares controlling for patients, hospital characteristics, and year fixed-effects. Results Data on 89,533 patients were examined. During the study period, the ALoS decreased except for one procedure, the number of inpatients increased for most procedures, and case severity remained stable. The multivariable analysis suggests that the transition to PRG-payments contributed to changes in ALoS or case severity for only 3 out of 15 procedures examined. The PRG-reform contributed to changes of 10%-45% in the number of patients, but there was no clear trend: it increased in 9, and decreased in 5. The changes did not follow a clear pattern according to procedures’ price changes after the reform. Conclusions Factors that may have hampered the effects of the PRG-reform are conflicting incentives created by other co-existing hospital-payment components, such as revenue caps and retrospective subsidies, and the lack of resources to increase productivity. Key messages Provider payment reforms should carefully coordinate the entire payment system, otherwise the incentives may be blurred. Uncoordinated reforms may miss their goals.

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Medicare's New Hospital Payment Rule: Limitations and Unintended Consequences

American Journal of Medical Quality ◽

10.1177/1062860609336220 ◽

2009 ◽

Vol 24 (4) ◽

pp. 347-351 ◽

Cited By ~ 1

Author(s):

Vinita Bahl ◽

Darrell A. Campbell

Keyword(s):

Unintended Consequences ◽

Hospital Payment

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Hospital payment system based on diagnosis related groups in Italy: early effects on elderly patients with heart failure

Archives of Gerontology and Geriatrics ◽

10.1016/s0167-4943(96)00741-8 ◽

1996 ◽

Vol 23 (3) ◽

pp. 347-355 ◽

Cited By ~ 6

Author(s):

Enrico Brizioli ◽

Aureliano Fraticelli ◽

Alberico Marcobelli ◽

Enrico Paciaroni

Keyword(s):

Heart Failure ◽

Elderly Patients ◽

Diagnosis Related Groups ◽

Payment System ◽

Patients With Heart Failure ◽

Hospital Payment ◽

Early Effects

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Changes in Public Hospital Employees’ Perceptions Following the Introduction of the New Diagnosis-Related Groups (DRG)-Based Payment System in the Republic of Korea

Quality Improvement in Health Care ◽

10.14371/qih.2021.27.2.30 ◽

2021 ◽

Vol 27 (2) ◽

pp. 30-44

Author(s):

Hyun Joo Kim ◽

Jin Yong Lee

Keyword(s):

Public Hospital ◽

Healthcare Professionals ◽

Diagnosis Related Groups ◽

Pilot Project ◽

Payment System ◽

Unintended Consequences ◽

Before And After ◽

The Republic ◽

The Government ◽

New Diagnosis

Purpose: The aim of this study was to investigate the changes in perception of the New Diagnosis-Related Group (DRG)- based payment system, make overall evaluation after participation, and examine opinions on further policy improvement among employees of a public hospital participating in the pilot project in Korea.Methods: We investigated changes in perception of the New DRG-based payment system before and after participation in the pilot project using a qualitative research method. We conducted individual in-depth interviews with the management and healthcare professionals and Focus Group Interviews (FGIs) with the staff in the nursing and administrative departments.Results: Before implementing the pilot project of the New DRG-based payment system, the management was in favor of participating in the pilot project, whereas the healthcare professionals were strongly opposed to participation in the pilot project, and the staff in the nursing and administrative departments were slightly opposed to participation. After implementing the pilot project, there were remarkable changes in the perception of the New DRG-based payment system among healthcare professionals and the administrative staff. Healthcare professionals’ perception was altered in a positive way, while the administrative staff’s perception of the system became negative.Conclusion: There were no restrictions on clinical practice or deterioration of quality of care observed in association with the participation in the New DRG-based payment system. However, certain unintended consequences of the New DRG-based payment system may arise as well. Therefore, the government needs to examine the problems identified in this study to reflect on and improve the New DRG-based payment system for stable expansion.

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The Use of Diagnosis-Related Group-Based Reimbursement in the Czech Hospital Care System

International Journal of Environmental Research and Public Health ◽

10.3390/ijerph18105463 ◽

2021 ◽

Vol 18 (10) ◽

pp. 5463

Author(s):

Zuzana Kotherová ◽

Martina Caithamlová ◽

Juraj Nemec ◽

Kateřina Dolejšová

Keyword(s):

Czech Republic ◽

Diagnosis Related Groups ◽

Care Quality ◽

The Czech Republic ◽

Drg System ◽

Positive Effects ◽

Current Implementation ◽

Related Group ◽

Hospital Payment ◽

Set Up

(1) Background: Diagnosis-Related Groups (DRG), one possibility of a hospital payment system, are currently used in most European countries. Introduced to the Czech system in the 1990s, the DRGs are currently used mainly for care reporting and partly for reimbursement. According to most experts, the use of DRG remain controversial. The goal of this paper was to study the effects of the current Czech DRG system on hospitals financing and, on this basis, to propose possible changes to the reimbursement mechanism in the Czech Republic. (2) Methods: Qualitative research methods were used for evaluating DRG mechanisms of application in three selected healthcare establishments in the CR in the period of 2012–2018. (3) Results: Our study shows that the current implementation of the DRG system is set up in a way that is very similar to traditional flat rates and is unlikely to yield major positive effects of the DRG mechanism, such as predictability of payments for hospitalisation cases, care quality and efficiency and transparent financing. (4) Conclusions: Based on our results, deep systemic change of the reimbursement mechanism in the Czech Republic is necessary. We propose five partial measures leading to the cultivation of the Czech DRG.

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Importance of coding co-morbidities for APR-DRG assignment: Focus on cardiovascular and respiratory diseases

Health Information Management Journal ◽

10.1177/1833358319840575 ◽

2019 ◽

Vol 49 (1) ◽

pp. 47-57 ◽

Cited By ~ 5

Author(s):

Julio Souza ◽

João Vasco Santos ◽

Veronica Bolon Canedo ◽

Amparo Betanzos ◽

Domingos Alves ◽

...

Keyword(s):

Respiratory Diseases ◽

Diagnosis Related Groups ◽

Severity Of Illness ◽

Support Vector ◽

Hospital Funding ◽

Co Morbidity ◽

Key Factor ◽

Hospital Payment ◽

The Individual ◽

Inpatient Database

Background: The All Patient-Refined Diagnosis-Related Groups (APR-DRGs) system has adjusted the basic DRG structure by incorporating four severity of illness (SOI) levels, which are used for determining hospital payment. A comprehensive report of all relevant diagnoses, namely the patient’s underlying co-morbidities, is a key factor for ensuring that SOI determination will be adequate. Objective: In this study, we aimed to characterise the individual impact of co-morbidities on APR-DRG classification and hospital funding in the context of respiratory and cardiovascular diseases. Methods: Using 6 years of coded clinical data from a nationwide Portuguese inpatient database and support vector machine (SVM) models, we simulated and explored the APR-DRG classification to understand its response to individual removal of Charlson and Elixhauser co-morbidities. We also estimated the amount of hospital payments that could have been lost when co-morbidities are under-reported. Results: In our scenario, most Charlson and Elixhauser co-morbidities did considerably influence SOI determination but had little impact on base APR-DRG assignment. The degree of influence of each co-morbidity on SOI was, however, quite specific to the base APR-DRG. Under-coding of all studied co-morbidities led to losses in hospital payments. Furthermore, our results based on the SVM models were consistent with overall APR-DRG grouping logics. Conclusion and implications: Comprehensive reporting of pre-existing or newly acquired co-morbidities should be encouraged in hospitals as they have an important influence on SOI assignment and thus on hospital funding. Furthermore, we recommend that future guidelines to be used by medical coders should include specific rules concerning coding of co-morbidities.

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Abstract T P302: Analysis of Publicly Available CMS Data on Hospital Charges and Reimbursements for Stroke Care

Stroke ◽

10.1161/str.45.suppl_1.tp302 ◽

2014 ◽

Vol 45 (suppl_1) ◽

Author(s):

Roople Unia ◽

Adam Kelly ◽

Robert Holloway

Keyword(s):

Cerebral Infarction ◽

Intracranial Hemorrhage ◽

Diagnosis Related Groups ◽

Stroke Care ◽

Hospital Charge ◽

Unintended Consequences ◽

Hospital Charges ◽

List Price ◽

Common Diagnosis

Background/ Purpose: The Centers for Medicare & Medicaid Services recently made 2011 hospital charge (i.e., list price) and total payment data (CMS reimbursement data and co-payments by patient) publicly available for common Diagnosis-Related Groups, including cerebral infarction/intracranial hemorrhage, at www.cms.gov. We provide descriptive statistics of the data and begin to explore the association of these data with the quality of stroke care hospital’s provide. Methods: We report the median, mean and extreme hospital charge and reimbursement data for cerebral infarction or intracranial hemorrhage without complications or comorbidity (CC) or major complications and comorbidities (MCC), with CC and with MCC. We report the correlation between charges and reimbursement as well as charge, reimbursement and hospital stroke volumes using a Spearman correlation coefficient. We also report median charge and reimbursement data by state for pooled stroke DRGs. Results: Data were available for 5735 hospitals. The minimum, median, mean, and maximum charge data were as follows: without CC or MCC: $5392, $19976, $23593, $117831; with CC: $5223, $25151, $29492, $162923; with MCC: $9539, $40953, $48522, $234913. The minimum, median, mean, and maximum reimbursement data were as follows: without CC or MCC: $3916, $5326, $5714, $14744; with CC: $5369, $7280, $7922, $26510; with MCC: $8174, $12084, $13263, $50882. There was modest correlation between hospital charges and reimbursement (without CC or MCC ρ= 0.28; with CC ρ= 0.38, with MCC ρ= 0.46.) There was less correlation between discharge volume and charges or reimbursements (ρ =0.15 and 0.12 respectively). By state, pooled median charges ranged from $10,150 (Maryland) to $58,032 (New Jersey). Pooled median reimbursements ranged from $6,306 (Alabama) to $11,529 (Alaska). Conclusions: The variability in the amount hospitals charge for stroke admissions is enormous and currently inexplicable. Much more research is needed to understand the reason for this variation and if there is any association to the quality of care provided; otherwise, this information may have unintended consequences for patients and providers.

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