3 EuroDRG FC or Berlin171111

8/9/2019 3 EuroDRG FC or Berlin171111

1/21

DRG based payment:the impact on quality and efficiency

Diagnosis-RelatedGroups in Europe:Towards Efficiency

and Quality

Institute for research and information in health economics

Zeynep Or ([email protected])Institute for Research in Health Economics (IRDES), France

On behalf of the EuroDRG roup

EuroDRG Final Conference, Berlin, 17 No em!er "#11


2/21

! "he most common mechanism for reimbursin hospitals inEurope

! Despite different DRG models# countries share commonob$ecti%es in mo%in to acti%ity&based fundin :! enhancin transparency!

DRGs as a payment mechanism

DRGs as a payment mechanism

! impro%in quality of care

'hat is the theory behind this 'hat is the e%idence

nd *hat are the +ey issues# problems# challen es

Diagnosis-Related Groups in Europe: Towards Efficiency and Quality


3/21

! Establish a transparent lin+ bet*een fundin and acti%ity(described by homo eneous patient roups)

! fi,ed price (ideally set independently of pro%iders- costs) forunit of acti%ity

! DRG payment is a form of yard&stic+/ competition desi ned

DRGs and efficiency: principles

DRGs and efficiency: principles

! Efficiency has different aspects (needs to be defined):technical efficiency# cost efficiency and allocati%e efficiency(optimal output0input mi,)



4/21

Revenues

Incentives of DRG-based hospital payment 11ncenti%es and hospital strate iesunder DRG payment

Number of Patients

Hospital revenues under activity based payments


5/21

Costs/ revenues

Total costs of treating one patientUpcoding

1 R =

2 p

Incentives of DRG-based hospital payment 11ncenti%es and hospital strate iesunder DRG payment

Efficiency gain via bettercare or anisation

LOSReduce LOS

Reduce unnecessary services

Options to avoid deficits under activity based payments


6/21

! 2ro%ide clear incenti%e to increase acti%ity (absent underretrospecti%e lobal bud ets) for the same inputs 3 4etter technical efficiency

! 2ro%ide direct incenti%es to minimi5e cost of hospital stay 3 4etter cost efficiency

DRGs and efficiency: *hat to e,pectDRGs and efficiency: *hat to e,pect

choice of inputs

! 6an promote efficient allocation of outputs if prices reflecttheir relati%e %alue

! O%erall DRG based hospital payment pro%ide stron erincenti%es for efficiency compared to the alternati%es (778 or

retrospecti%e lobal bud ets)Diagnosis-Related Groups in Europe: Towards Efficiency and Quality


7/21

! $ualit% : any aspect of the ser%ice that benefits patientsdurin the process of treatment or impro%es health outcomeafter treatment

! DRGs payment pro%ide incenti%es to reduce the cost per stayirrespecti%e of outcomes

DRGs and quality: *hat to e,pectDRGs and quality: *hat to e,pect

efficiency throu h or anisational chan es

! 4ut they also can s+imp on quality as a *ay of cost sa%in

! "he impact on quality of care is not clear a priori/ 3 1t is difficult to obser%e and quantify the quality of care pro%ided (not

al*ays consensus on *hat is ood quality) 3 Difficult to distin uish *hether a bad medical outcome is attributable

to the underlyin disease or bad quality of care



8/21

Costs/ revenues

Total costs of treating one patientIncrease revenue

1 R =

2 p

Incentives of DRG-based hospital payment 11ncenti%es and hospital strate ies

under DRG payment

Efficiency gain via bettercare organisation

LOS1a) Reduce LOS

Reduce intensity of services

Options to avoid deficits under activity based payments


9/21

! Determined by multiple economic incenti%es pro%ided by thepayment mechanism. 2ro%iders can:

3 Dischar e patients earlier than clinically appropriate 3 O%er&pro%ide certain ser%ices to push the patient into a hi her&payin

cate ory

;uality of treatment is a choice %ariable of pro%iders;uality of treatment is a choice %ariable of pro%iders

3


10/21

! 8tudies of the impact of DRGs on efficiency mostly focus ontechnical efficiency or producti%ity

! =ery fe* lon itudinal studies loo+in at before0after! 7indin s are mi,ed >

3 1mpro%ed technical efficiency (2ortu al# 8*eden# ?or*ay) but nothin

DRGs and efficiency: summary of e%idenceDRGs and efficiency: summary of e%idence

#

! Di%er ent results may be e,plained by the country specificstartin points and conte,ts

! Difficult to isolate the impact of DRG payment *hen it is

introduced as part of a *ider reform pro ramme



11/21

Country Study Activity ALoSUS, 1983 US Congress - Office of

Technology Assessment, 1985

Guterman et al., 1988

Empirical evidence (I):hospital activity and length-of-stay under DRGs

USA1980s

,Kahn et al., 1990

Manton et al., 1993

Muller, 1993

Rosenberg and Browne, 2001

DRGs in Europe: o%in to*ards transparency# efficiency and quality in hospitals

Cf. Table 7.4 in the book


12/21

Country Study Activity ALoSSweden,early 1990s

Anell, 2005

Kastberg and Siverbo, 2007

Italy, 1995 Louis et al., 1999

Ettelt et al., 2006

Spain, 1996 Ellis/ Vidal-Fernndez, 2007

Norway,1997

Birn et al., 2003

Kjerstad, 2003

Empirical evidence (II)

agen e a .,Magnussen et al., 2007

Austria, 1997 Theurl and Winner, 2007

Denmark, 2002 Street et al., 2007

Germany, 2003 Bcking et al., 2005

Schreygg et al., 2005 Hensen et al., 2008

England,2003/4

Farrar et al., 2007

Audit Commission, 2008

Farrar et al., 2009 France, 2004/5 Or, 2009

Europeancountries

1990/2000s

Cf. Table 7.4


13/21

! AO8 enerally declined follo*in the mo%e to the DRG&based payment

! Dischar e rates to post&acute institutions increased! On a%era e# recorded se%erity of patients has increased

! 1n most European countries# the introduction of DRG

DRGs and efficiency: summary of common trendsDRGs and efficiency: summary of common trends

paymen ncrease o a osp a cos s# par y ue o eracti%ity le%els



14/21

! 8horter AO8 associated sometimes *ith a rise in li+elihood thatpatients dischar ed in unstable condition (


15/21

! 1n Europe: ?o impact on health outcomes measured by specificmortality and readmission rates (1taly# ?or*ay# 8*eden#

En land)! 6han e in codin practices in 8*eden (more secondary

dia nosis)# 7rance (DRG drift)

;uality: Re%ie* of e%idence (B);uality: Re%ie* of e%idence (B)

! Generally# consensus that quality can be an issue in DRG basedpayment



16/21

1nte ratin quality into DRG payment1nte ratin quality into DRG payment

!


17/21

odels of payment inte ratin qualityodels of payment inte ratin quality

! 9ospital income could be ad$usted on the basis of hospitalle%el quality indicators:! En land quality accounts/! edicare0 edicaid


18/21

odels of payment (B)odels of payment (B)

! more challen in option: ad$ust DRG prices for encoura inmedical practice considered as ood quality/ mo%in a*ayfrom pricin based on a%era e obser%ed costs

! 1n En land# best practice tariffs-! introduced for four areas *here si nificant une,plained %ariation in

quality clear e%idence of *hat constitutes best practice


practice care are met (lo*er payment for non&compliance)

! incenti%i5e day&case acti%ity for cholecystectomy price co%ers theentire path*ay for cataract (streamlined electi%e cataract) etc.


19/21

! Gettin patient classification ri ht: definin a standard pac+a eof care/ on the basis of e,pected resource use is notstrai htfor*ard

! 2otentially unfair reimbursement if systematic differencesacross pro%iders

! Establishin costs0price uncontaminated by inefficient

Fey issuesFey issues

beha%iour! 6ontrollin hospital e,penditure

3 9ospital0macro le%el %olume control mechanisms 3 2ossible to operate DRG&based hospital payment *ithin a Global bud et

frame*or+

! %oid unintended consequences in terms of quality# cost&shiftin # patient selection



20/21

! DRG based payment systems pro%ide opportunities forenhancin efficiency and impro%in quality of care but alsorepresent ris+s

! DRGs ma+es it possible to i%e e,plicit incenti%es forprocedures0treatments considered better quality and hi her%alue/# to penalise bad0inefficient practice/ or to rant

6onclusions6onclusions

financin for impro%in patient outcomes! pplications of DRG based fundin in Europe has e%ol%ed rapidly

to impro%e efficiency and quality



21/21

! DRGs contributed to enhance understandin of the relationshipbet*een resource use and the acti%ity in acute care settin

! ay contribute impro%ed plannin of ser%ice deli%ery0quality! Essential for its success:

3 %ailability of a stron information system for monitorin quality

6onclusions6onclusions

efficiency (*ide aps bet*een countries) 3 7le,ible and transparent o%ernance supportin continuous fine&

tunin of the incenti%e structure


3 EuroDRG FC or Berlin171111

Documents

Transcript of 3 EuroDRG FC or Berlin171111