What explains DRG upcoding in neonatology? The roles of financial incentives and infant health

Diagnosis Related Payment for Inpatient Mental Health Care: Hospital Selection and Effects on Length of Stay

We study a policy introducing diagnosis related payment for inpatient mental health care in Germany with rates decreasing over length of stay. Using data on all hospital cases, we first examine which hospitals voluntarily opt into the new scheme. We show that specialized hospitals that treat more complicated cases and are reimbursed more highly under the new scheme select into it. Second, we study the effect of diagnosis related payment on length of stay. We find that diagnosis related payment is associated with large reductions in length of stay but has no effect on mortality, post-acute care, or the ambulatory sector. We argue that the reductions in length of stay are driven by the fact that diagnoses related reimbursement is higher for more complex cases and by payment decreasing over length of stay. This novel evidence contributes to a scarce literature on the role of payment systems for inpatient mental health care and provides important insights for policymakers.

Impact of the Diagnosis-Intervention Packet Payment Reform on Provider Behavior in China: A Controlled Interrupted Time Series Study

BACKGROUND

China has developed a novel case-based payment method called the DiagnosisIntervention Packet (DIP) to regulate healthcare providers' behavior. G city, a metropolis in southeast China, has shifted its payment policy from fixed rate per admission to DIP under regional global budget since 2018. This study examined the immediate and trend changes in provider behavior after this payment reform.

METHODS

Discharge data in G city between 2016 and 2019 was used, covering more than 10 million inpatient cases in 320 hospitals. A counterfactual scenario was developed to assign insured and uninsured inpatients across the study period to specific DIP groups under consistent rules. Controlled interrupted time-series (ITS) analyses were performed, with uninsured inpatients as control. Outcomes included inpatient volume, average DIP weight (similar to case-mix index in Diagnosis-Related Groups), and two innovative indicators (average diagnostic weight and average treatment weight) to decompose the changes in DIP weight. Subgroup analyses were conducted for different hospital levels and 21 major disease categories.

RESULTS

After the DIP reform, monthly trend of inpatient volume decreased (-1085.34, P=0.052), while monthly growth of average DIP weight increased (2.17, P=0.02). No significant changes in average diagnostic weight were observed. Monthly trend of average treatment weight increased (2.38, P=0.001) after the reform. Secondary and tertiary hospitals experienced insignificantly decreased inpatient volume and elevated average DIP weight, accompanied by negligible change in average diagnostic weight and significant increase in average treatment weight. Primary hospitals experienced reduced inpatient volume and stable average DIP weight, along with increase in average diagnostic weight and decrease in average treatment weight.

CONCLUSION

By differentiated payments for severity, DIP induced hospitals to shift their focus from volume to weight of inpatients. Instead of diagnostic upcoding, hospitals responded to the DIP reform primarily by increasing treatment intensity. Primary hospitals may face financial risks under regional competition.

National Health Insurance Claim of Pediatric Appendectomy With Mandatory Diagnosis-Related Group Payment System in Korea

INTRODUCTION

Enforcement of diagnosis-related group system for appendectomy under the National Health Insurance Service has gradually widened and since July 2013 it has been enforced in all medical institutions in Korea. We have analyzed Health Insurance Review & Assessment Service data to observe changes in claim patterns of pediatric appendectomy during this period.

METHODS

All claims data for appendectomy of patients younger than 18 y from 2011 to 2015 were collected. We analyzed the following factors of all cases: age, gender, length of hospital stay, medical cost, method of insurance claim and region.

RESULTS

A total of 112,143 claims were made for appendectomy during the study period. In that, 66,510 (59.3%) were boys and 45,633 (40.7%) were girls. Median length of stay was 5 d and median sum of reimbursement of each claim was 2,198,630 won. Annual number of claims for appendectomy showed a steady decline from 24,888 in 2011 to 19,070 in 2015. Median sum of reimbursement of each claim was 1,862,615, 1,975,500, 2,233,360, 2,376,700, and 2,468,000 won, respectively from 2011 to 2015. Reimbursement for complicated appendectomy increased from 4400 out of 24,888 cases (17.7%) in 2011 to 3865 out of 19,070 cases (20.3%) in 2015. Overall medical cost of all reimbursement for pediatric appendectomy increased from 46,113,202,580 to 47,572,253,300 won.

CONCLUSIONS

Following the universal enforcement of the diagnosis-related group claim system for appendectomy by the National Health Insurance Service, we observed an increase in the median sum of reimbursement per claim and a rise in the rate of claims for complicated appendectomies. These changes were associated with an overall increase in national medical costs.

Fragmentation of payment systems: an in-depth qualitative study of stakeholders' experiences with the neonatal intensive care payment system in Iran

BACKGROUND

Iran's fee-for-service (FFS) payment model in neonatal intensive care units (NICUs) is contentious due to the involvement of multiple stakeholders with differing interests, leading to increased costs, fragmentation, and reduced quality of care. This study explores the experiences and challenges of stakeholders with the NICU payment system and considers alternative payment methods.

METHOD

A qualitative research approach was used, involving key informant interviews with stakeholders at various levels of the health system. Data were collected between March 2022 to September 2023 using a purposive sampling method with a snowball strategy. The transcribed data were analyzed using an inductive thematic approach in MAXQDA, with themes and sub-themes emerged and assessed by two independent coders. Four trustworthiness criteria were applied to ensure the quality of the results.

RESULTS

The study involved 23 participants with diverse NICU payment backgrounds, identifying issues related to service accessibility, rising costs, neonatologists' income, and service quality. Stakeholders held differing views on the best payment model: health insurance executives favored a prospective payment method, faculty members favored supported modified FFS or per diem, and neonatal specialists expressed concerns about low tariffs and delayed payments.

CONCLUSION

Iran's NICU payment system is unsatisfactory and requires urgent reform. Although stakeholders disagree on the best approach, reforms must be evidence-based and collaborative, addressing structural and cultural issues within the health system. The identification of an optimal payment system is essential for supporting neonatal care, benefiting newborns, families, society, and the broader health system.

Country-level effects of diagnosis-related groups: evidence from Germany's comprehensive reform of hospital payments

Hospitals account for about 40% of all healthcare expenditure in high-income countries and play a central role in healthcare provision. The ways in which they are paid, therefore, has major implications for the care they provide. However, our knowledge about reforms that have been made to the various payment schemes and their country-level effects is surprisingly thin. This study examined the uniquely comprehensive introduction of diagnosis-related groups (DRGs) in Germany, where DRGs function as the sole pricing, billing, and budgeting system for hospitals and almost exclusively determine hospital revenue. The introduction of DRGs, therefore, completely overhauled the previous system based on per diem rates, offering a unique opportunity for analysis. Using aggregate data from the Organisation for Economic Co-operation and Development and recent advances in econometrics, we analyzed how hospital activity and efficiency changed in response to the reform. We found that DRGs in Germany significantly increased hospital activity by around 20%. In contrast to earlier studies, we found that DRGs have not necessarily shortened the average length of stay.

The end of an era? Activity-based funding based on diagnosis-related groups: A review of payment reforms in the inpatient sector in 10 high-income countries

CONTEXT

Across the member countries of the Organisation for Economic Co-Operation and Development, policy makers are searching for new ways to pay hospitals for inpatient care to move from volume to value. This paper offers an overview of the latest reforms and their evidence to date.

METHODS

We reviewed reforms to DRG payment systems in 10 high-income countries: Australia, Austria, Canada (Ontario), Denmark, France, Germany, Norway, Poland, the United Kingdom (England), and the United States.

FINDINGS

We identified four reform trends among the observed countries, them being (1) reductions in the overall share of inpatient payments based on DRGs, (2) add-on payments for rural hospitals or their exclusion from the DRG system, (3) episode-based payments, which use one joint price to pay providers for all services delivered along a patient pathway, and (4) financial incentives to shift the delivery of care to less costly settings. Some countries have combined some or all of these measures with financial adjustments for quality of care. These reforms demonstrate a shift away from activity and efficiency towards a diversified set of targets, and mirror efforts to slow the rise in health expenditures while improving quality of care. Where evaluations are available, the evidence indicates mixed success in improving quality of care and reducing costs and expenditures.

Incidence of moral hazards among health care providers in the implementation of social health insurance toward universal health coverage: evidence from rural province hospitals in Indonesia

Objective

To identify the incidence of moral hazards among health care providers and its determinant factors in the implementation of national health insurance in Indonesia.

Methods

Data were derived from 360 inpatient medical records from six types C public and private hospitals in an Indonesian rural province. These data were accumulated from inpatient medical records from four major disciplines: medicine, surgery, obstetrics and gynecology, and pediatrics. The dependent variable was provider moral hazards, which included indicators of up-coding, readmission, and unnecessary admission. The independent variables are Physicians' characteristics (age, gender, and specialization), coders' characteristics (age, gender, education level, number of training, and length of service), and patients' characteristics (age, birth weight, length of stay, the discharge status, and the severity of patient's illness). We use logistic regression to investigate the determinants of moral hazard.

Results

We found that the incidences of possible unnecessary admissions, up-coding, and readmissions were 17.8%, 11.9%, and 2.8%, respectively. Senior physicians, medical specialists, coders with shorter lengths of service, and patients with longer lengths of stay had a significant relationship with the incidence of moral hazard.

Conclusion

Unnecessary admission is the most common form of a provider's moral hazard. The characteristics of physicians and coders significantly contribute to the incidence of moral hazard. Hospitals should implement reward and punishment systems for doctors and coders in order to control moral hazards among the providers.

[Financial Influence on Medical Decisions in Germany - A Review of the Reasons and State of Research on Economization in Inpatient Care]

Increased economization in the German health care system may have an impact on medical decisions. A selective literature search presents an overview of the current evidence on the influence of financial incentives on inpatient healthcare in Germany. Due to the current economic pressure, physicians increasingly feel subjected to financial constraints concerning indication and treatment decisions. There is evidence for financially initiated upcoding and volume expansion. Little is known about the extent, the impact on quality of care, nor on vulnerable groups. The literature clearly documents effects of financial pressure on job satisfaction, perceived stress, and the health of attending physicians. The current discussion on the economization of physician practice is important, especially with regard to disincentives and job satisfaction. Little is known about the risks to patient health.

Provider responses to discontinuous tariffs: evidence from Dutch rehabilitation care

Abrupt jumps in reimbursement tariffs have been shown to lead to unintended effects in physicians' behavior. A sudden change in tariffs at a pre-defined point in the treatment can incentivize health care providers to prolong treatment to reach the higher tariff, and then to discharge patients once the higher tariff is reached. The Dutch reimbursement schedule in hospital rehabilitation care follows a two-threshold stepwise-function based on treatment duration. We investigated the prevalence of strategic discharges around the first threshold and assessed whether their share varies by provider type. Our findings suggest moderate response to incentives by traditional care providers (general and academic hospitals, rehabilitation centers and multicategorical providers), and strong response by profit-oriented independent treatment centers. When examining the variation in response based on the financial position of the organization, we found a higher probability of manipulation among providers in financial distress. Our findings provide multiple insights and possible indicators to identify provider types that may be more prone to strategic behavior.

Corruption in the health sector: A problem in need of a systems-thinking approach

Health systems are comprised of complex interactions between multiple different actors with differential knowledge and understanding of the subject and system. It is exactly this complexity that makes it particularly vulnerable to corruption, which has a deleterious impact on the functioning of health systems and the health of populations. Consequently, reducing corruption in the health sector is imperative to strengthening health systems and advancing health equity, particularly in low- and middle-income countries (LMICs). Although health sector corruption is a global problem, there are key differences in the forms of and motivations underlying corruption in health systems in LMICs and high-income countries (HICs). Recognizing these differences and understanding the underlying system structures that enable corruption are essential to developing anti-corruption interventions. Consequently, health sector corruption is a problem in need of a systems-thinking approach. Anti-corruption strategies that are devised without this understanding of the system may have unintended consequences that waste limited resources, exacerbate corruption, and/or further weaken health systems. A systems-thinking approach is important to developing and successfully implementing corruption mitigation strategies that result in sustainable improvements in health systems and consequently, the health of populations.

Price and income effects of hospital reimbursements

Health insurance systems in many countries reimburse hospitals through fixed prices based on the diagnosis-related groups (DRGs) of patients. We quantify the effects of price and income changes for the full spectrum of hospital services as average and heterogeneous elasticities of quantities (number of admissions) and quality-related outcomes. For our empirical analysis, we use data on over 160 million hospital admissions, constituting the universe of hospital admissions in Germany between 2005 and 2016. Our identification strategy is based on instruments exploiting a two-year lag in regulatory price setting. The strategy lends itself to a placebo test demonstrating that our instruments do not have substantive anticipatory direct effects. We find that the compensated own-price elasticity of quantity is positive (0.2), while the income elasticity is negative (-0.15). On net, increasing all prices increases costs due to a behavioral response of larger quantities in addition to the mechanical increase.

Hospital response to a case-based payment scheme under regional global budget: The case of Guangzhou in China

Both developed and developing countries have been searching for effective provider payment methods to control health expenditure inflation. In January 2018, Guangzhou city in Southern China initiated an innovative case-based payment method for inpatient care under the framework of the regional global budget, called the Diagnosis-Intervention Packet (DIP). Contrary to the usual practice of the case-based payment, the DIP payment scheme includes a price adjustment mechanism through which the actual reimbursement for each case is determined ex post. By employing the difference-in-difference method and data from Beijing and Guangzhou, we evaluate the effects of the DIP payment on medical expenditures and provider behaviors. We find that total health expenditures per case have decreased by 3.5%, which is mainly driven by a substantial decrease in drug expenditures. It suggests that the DIP payment reform achieved a short-term success in slowing down the growth of health expenditures. However, the average point volume per case for local inpatients with social health insurance coverage has increased by more than 3%, primarily due to an increasing likelihood of performing at least one procedure. We also find suggestive evidence of up-coding. All these results suggest that healthcare providers have taken strategic behaviors in response to the DIP payment. These findings hold lessons for the ongoing payment reforms in China and other countries.

Analysis of root causes of problems affecting the quality of hospital administrative data: A systematic review and Ishikawa diagram

INTRODUCTION

Administrative hospital databases represent an important tool for hospital financing in many national health systems and are also an important data source for clinical, epidemiological and health services research. Therefore, the data quality of such databases is of utmost importance. This paper aims to present a systematic review of root causes of data quality problems affecting administrative hospital data, creating a catalogue of potential issues for data quality analysts to explore.

METHODS

The MEDLINE and Scopus databases were searched using inclusion criteria based on two following concept blocks: (1) administrative hospital databases and (2) data quality. Studies' titles and abstracts were screened by two reviewers independently. Three researchers independently selected the screened studies based on their full texts and then extracted the potential root causes inferred from them. These were subsequently classified according to the Ishikawa model based on 6 categories: "Personnel", "Material", "Method", "Machine", "Mission" and "Management".

RESULTS

The result of our investigation and the contribution of this paper is a classification of the potential (105) root causes found through a systematic review of the 77 relevant studies we have identified and analyzed. The result was represented by an Ishikawa diagram. Most of the root causes (25.7%) were associated with the category "Personnel" - people's knowledge, preferences, education and culture, mostly related to clinical coders and health care providers activities. The quality of hospital documentation, within category "Material", and aspects related to financial incentives or disincentives, within category "Mission", were also frequently cited in the literature as relevant root causes for data quality issues.

CONCLUSIONS

The resultant catalogue of root causes, systematized using the Ishikawa framework, provides a compilation of potential root causes of data quality issues to be considered prior to reusing these data and that can point to actions aimed at improving data quality.

Analysis of Health Care Billing via Quantile Variable Selection Models

Fraudulent billing of health care insurance programs such as Medicare is in the billions of dollars. The extent of such overpayments remains an issue despite the emerging use of analytical methods for fraud detection. This motivates policy makers to also be interested in the provider billing characteristics and understand the common factors that drive conservative and/or aggressive behavior. Statistical approaches to tackling this problem are confronted by the asymmetric and/or leptokurtic distributions of billing data. This paper is a first attempt at using a quantile regression framework and a variable selection approach for medical billing analysis. The proposed method addresses the varying impacts of (potentially different) variables at the different quantiles of the billing aggressiveness distribution. We use the mammography procedure to showcase our analysis and offer recommendations on fraud detection.

The effects of audits and fines on upcoding in neonatology

Upcoding is a common type of fraud in healthcare. However, how audit policies need to be designed to cope with upcoding is not well understood. We provide causal evidence on the effect of random audits with different probabilities and financial consequences. Using a controlled laboratory experiment, we mimic the decision situation of obstetrics staff members to report birth weights of neonatal infants. Subjects' payments in the experiment depend on their reported birth weights and follow the German non-linear diagnosis-related group remuneration for neonatal care. Our results show that audits with low detection probabilities only reduce fraudulent birth-weight reporting, when they are coupled with fines for fraudulent reporting. For audit policies with fines, increasing the probability of an audit only effectively enhances honest reporting, when switching from detectable to less gainful undetectable upcoding is not feasible. Implications for audit policies are discussed.

Impacts of Diagnosis-Related Groups Payment on the Healthcare Providers' Behavior in China: A Cross-Sectional Study Among Physicians

Purpose

Currently, China is piloting diagnosis-related groups (DRG) payment system in 30 cities. The main aim of this study was to explore the respondents' impressions regarding the hospitals' policies and physicians' behavior change brought by the DRG payment system, and investigate whether and how the hospitals' policies affect the physicians' behavior.

Methods

We distributed questionnaires designed for this study to 200 physicians. Data analysis consisted of descriptive statistics, T-test, and network analysis.

Results

Respondents stated that the hospitals had adopted several policies in response to DRG payment and DRG payment could reduce overtreatment and improve efficiency. However, it also led to several negative effects including an increased explanation to the patients, hindering new technologies, case splitting, and cherry picking. In addition, there was no evidence that harmful effects such as refusing patients and premature discharge existed. Overall, the benefits outweighed the drawbacks of DRG. Moreover, the hospitals' policies could effectively change physician behaviors. Our results indicated that promoting the implementation of clinical pathways had the most positive impact, while limiting costs and length of stay is not recommended.

Conclusion

In general, Chinese physicians who participated in the questionnaire possessed relatively positive attitudes towards the DRG payment system. Nevertheless, some of the negative impacts cannot be ignored. Meanwhile, the hospitals' policies should be implemented with adequate consideration of the impact on physicians' behavior.

Monitoring institutions in healthcare markets: Experimental evidence

This paper investigates the impact of monitoring institutions on market outcomes in health care. Healthcare markets are characterized by asymmetric information. Physicians have an information advantage over patients with respect to appropriate treatments, which they may exploit through over- or under-provision or by overcharging. We introduce two types of costly monitoring: endogenous and exogenous monitoring. When monitoring detects misbehavior, physicians have to pay a fine. Endogenous monitoring can be requested by patients, while exogenous monitoring is performed randomly by a third party. We present a toy model that enables us to derive hypotheses and test them in a laboratory experiment. Our results show that introducing endogenous monitoring reduces the level of undertreatment and overcharging. Even under high monitoring costs, the threat of patient monitoring is sufficient to discipline physicians. Exogenous monitoring also reduces undertreatment and overcharging when performed sufficiently frequently. Market efficiency increases when endogenous monitoring is introduced and when exogenous monitoring is implemented with sufficient frequency. Our results suggest that monitoring may be a feasible instrument to improve outcomes in healthcare markets.

How do hospitals respond to cross price incentives inherent in diagnosis-related groups systems? The importance of substitution in the market for sepsis conditions

This study addresses the question of how hospitals respond to the cross price incentives inherent in reimbursements based on diagnosis-related groups (DRG). Unique market-wide administrative data allow to exploit a natural experiment in Germany in which the relative attractiveness of greatly divergent reimbursements for clinically similar patients changes in the market for sepsis conditions on January 1, 2010. This natural experiment provides-unintentionally-extra reimbursements in cases in which hospitals reorganize transfers for deceasing patients to other facilities, alter the time of death, the choice of the condition being chiefly responsible for the hospital admission (primary diagnosis), or the intensity of mechanical ventilation. The differences-in-differences results demonstrate that hospitals primarily alter the primary diagnosis. As the choice of the primary diagnosis is the backbone of the design of modern DRG systems, the findings suggest that payment contracts between hospitals and payers based on modern DRG algorithms may not necessarily improve patient welfare.

Managerial workarounds in three European DRG systems

Purpose

Attempts to transform health systems have in many countries involved starting to pay healthcare providers through a DRG system, but that has involved managerial workarounds. Managerial workarounds have seldom been analysed. This paper does so by extending and modifying existing knowledge of the causes and character of clinical and IT workarounds, to produce a conceptualisation of the managerial workaround. It further develops and revises this conceptualisation by comparing the practical management, at both provider and purchaser levels, of hospital DRG payment systems in England, Germany and Italy.

Design/methodology/approach

We make a qualitative test of our initial assumptions about the antecedents, character and consequences of managerial workarounds by comparing them with a systematic comparison of case studies of the DRG hospital payment systems in England, Germany and Italy. The data collection through key informant interviews ( N  = 154), analysis of policy documents ( N  = 111) and an action learning set, began in 2010–12, with additional data collection from key informants and administrative documents continuing in 2018–19 to supplement and update our findings.

Findings

Managers in all three countries developed very similar workarounds to contain healthcare costs to payers. To weaken DRG incentives to increase hospital activity, managers agreed to lower DRG payments for episodes of care above an agreed case-load ‘ceiling' and reduced payments by less than the full DRG amounts when activity fell below an agreed ‘floor' volume.

Research limitations/implications

Empirically this study is limited to three OECD health systems, but since our findings come from both Bismarckian (social-insurance) and Beveridge (tax-financed) systems, they are likely to be more widely applicable. In many countries, DRGs coexist with non-DRG or pre-DRG systems, so these findings may also reflect a specific, perhaps transient, stage in DRG-system development. Probably there are also other kinds of managerial workaround, yet to be researched. Doing so would doubtlessly refine and nuance the conceptualisation of the ‘managerial workaround’ still further.

Practical implications

In the case of DRGs, the managerial workarounds were instances of ‘constructive deviance' which enabled payers to reduce the adverse financial consequences, for them, arising from DRG incentives. The understanding of apparent failures or part-failures to transform a health system can be made more nuanced, balanced and diagnostic by using the concept of the ‘managerial workaround'.

Social implications

Managerial workarounds also appear outside the health sector, so the present analysis of managerial workarounds may also have application to understanding attempts to transform such sectors as education, social care and environmental protection.

Originality/value

So far as we are aware, no other study presents and tests the concept of a ‘managerial workaround'. Pervasive, non-trivial managerial workarounds may be symptoms of mismatched policy objectives, or that existing health system structures cannot realise current policy objectives; but the workarounds themselves may also contain solutions to these problems.

Hospital responses to the refinement of reimbursements by treatment intensity in DRG systems

Many OECD countries have replaced per-diem hospital reimbursement with lump sum payments by diagnosis-related groups. This study analyzes hospital responses to a large-scale refinement of reimbursement practices in Germany on January 1, 2006, in which regulating authorities introduce reimbursements by treatment intensity in the market for stroke disorder. We find that the share of admissions receiving high-intensity treatments jumps by approximately 7 percentage points around the turn of the year. At the same time, a decrease in the average clinical severity of patients receiving these high-intensity treatments reveals that the marginal high-intensity treated patient in 2006 might be less appropriate for high-intensity treatments compared to 2005. We do not find accompanying (short-term) changes in the quality of care, such as decreases in in-hospital mortality.

Depression treatment in Germany - using claims data to compare a collaborative mental health care program to the general practitioner program and usual care in terms of guideline adherence and need-oriented access to psychotherapy

BACKGROUND

Societies strive for fast-delivered, evidence-based and need-oriented depression treatment within budget constraints. To explore potential improvements, selective contracts can be implemented. Here, we evaluate if the German collaborative psychiatry-neurology-psychotherapy contract (PNP), which extends the gatekeeping-based general practitioner (GP) program, improved guideline adherence or need-oriented and timely access to psychotherapy compared to usual care (UC).

METHODS

We conducted a retrospective observational cohort study based on health insurance claims data. After we identified patients with depression who were on sick leave due to a mental disorder in 2015, we applied entropy balancing to adjust for selection effects and employed chi-squared tests to compare guideline adherence of the received treatment between PNP, the GP program and UC. Subsequently, we applied an extended cox regression to assess need-orientation by comparing the relationship between accumulated sick leave days and waiting times for psychotherapy across health plans.

RESULTS

N = 23,245 patients were included. Regarding guideline adherence, we found no significant differences for most severity subgroups; except that patients with a first moderate depressive episode received antidepressants or psychotherapy more often in UC. Regarding need-orientation, we observed that the effect of each additional month of sick leave on the likelihood of starting psychotherapy was increased by 6% in PNP compared to UC. Irrespective of the health plan, we found that within the first 12 months only between 24.3 and 39.7% (depending on depression severity) received at least 10 psychotherapy sessions or adequate pharmacotherapy.

CONCLUSIONS

The PNP contract strengthens the relationship between sick leave days and the delay until the beginning of psychotherapy, which suggests improvements in terms of need-oriented access to care. However, we found no indication for increased guideline adherence and - independent of the health plan - a gap in sufficient utilization of adequate treatment options.

Characteristics and related factors of emergency department visits, readmission, and hospital transfers of inpatients under a DRG-based payment system: A nationwide cohort study

Objectives

Taiwan has implemented the Diagnosis Related Groups (DRGs) since 2010, and the quality of care under the DRG-Based Payment System is concerned. This study aimed to examine the characteristics, related factors, and time distribution of emergency department (ED) visits, readmission, and hospital transfers of inpatients under the DRG-Based Payment System for each Major Diagnostic Category (MDC).

Methods

We conducted a retrospective cohort study using data from the National Health Insurance Research Database (NHIRD) from 2012 to 2013 in Taiwan. Multilevel logistic regression analysis was used to examine the factors related to ED visits, readmissions, and hospital transfers of patients under the DRG-Based Payment System.

Results

In this study, 103,779 inpatients were under the DRG-Based Payment System. Among these inpatients, 4.66% visited the ED within 14 days after their discharge. The factors associated with the increased risk of ED visits within 14 days included age, lower monthly salary, urbanization of residence area, comorbidity index, MDCs, and hospital ownership (p < 0.05). In terms of MDCs, Diseases and Disorders of the Kidney and Urinary Tract (MDC11) conferred the highest risk of ED visits within 14 days (OR = 4.95, 95% CI: 2.69–9.10). Of the inpatients, 6.97% were readmitted within 30 days. The factors associated with the increased risk of readmission included gender, age, lower monthly salary, comorbidity index, MDCs, and hospital ownership (p < 0.05). In terms of MDCs, the inpatients with Pregnancy, Childbirth and the Puerperium (MDC14) had the highest risk of readmission within 30 days (OR = 20.43, 95% CI: 13.32–31.34). Among the inpatients readmitted within 30 days, 75.05% of them were readmitted within 14 days. Only 0.16% of the inpatients were transferred to other hospitals.

Conclusion

The study shows a significant correlation between Major Diagnostic Categories in surgery and ED visits, readmission, and hospital transfers. The results suggested that the main reasons for the high risk may need further investigation for MDCs in ED visits, readmissions, and hospital transfers.

Real-world evaluation of adverse pregnancy outcomes in women with gestational diabetes mellitus in the German health care system

AIMS

This study aims to estimate the incidence of adverse pregnancy outcomes in women with gestational diabetes mellitus (GDM) in Germany.

METHODS

Pregnant women were identified from a health claims database for the year of 2016. Three groups were defined: general population without GDM, women with GDM without treatment and women with GDM and insulin treatment. Operationalisation of outcomes was aligned with the hyperglycaemia and adverse pregnancy outcomes (HAPO) study.

RESULTS

The cohort consisted of 58,297 mother-child pairs. Of those, 7245 had a GDM diagnosis and 1407 had a GDM diagnosis with a prescription of insulin. Adverse pregnancy outcomes were higher in both GDM groups compared to the control group. Birthweight (OR 2.08 [95% CI 1.50-2.90]), primary caesarean section (OR 1.70 [95% CI 1.48-1.95]), intensive neonatal care (OR 1.25 [95% CI 1.04-1.50]), preeclampsia (OR 1.51 [95% CI 1.23-1.85]), and clinical neonatal hypoglycaemia (OR 5.32 [95% CI 4.27-6.62]) were higher in the GDM+insulin group in comparison to a control group after adjustment for potential confounders.

CONCLUSION

Most of the adverse pregnancy outcomes were moderately higher in both identified GDM groups in comparison to women without GDM. Women receiving insulin treatment are at an increased risk of most of the defined adverse pregnancy outcomes.

Performance Pay in Hospitals: An Experiment on Bonus-Malus Incentives

Recent policy reforms in Germany require the introduction of a performance pay component with bonus–malus incentives in the inpatient care sector. We conduct a controlled online experiment with real hospital physicians from public hospitals and medical students in Germany, in which we investigate the effects of introducing a performance pay component with bonus–malus incentives to a simplified version of the German Diagnosis Related Groups (DRG) system using a sequential design with stylized routine cases. In both parts, participants choose between the patient optimal and profit maximizing treatment option for the same eight stylized routine cases. We find that the introduction of bonus–malus incentives only statistically significantly increases hospital physicians’ proportion of patient optimal choices for cases with high monetary baseline DRG incentives to choose the profit maximizing option. Medical students behave qualitatively similar. However, they are statistically significantly less patient oriented than real hospital physicians, and statistically significantly increase their patient optimal decisions with the introduction of bonus–malus incentives in all stylized routine cases. Overall, our results indicate that whether the introduction of a performance pay component with bonus–malus incentives to the (German) DRG system has a positive effect on the quality of care or not particularly depends on the monetary incentives implemented in the DRG system as well as the type of participants and their initial level of patient orientation.

Do hospitals respond to changing incentive structures? Evidence from Medicare's 2007 DRG restructuring

In 2007, the Centers for Medicare and Medicaid restructured the diagnosis related group (DRG) system by expanding the number of categories within a DRG to account for complications present within certain conditions. This change allows for differential reimbursement depending on the severity of the case. We examine whether this change incentivized hospitals to upcode patients as sicker to increase their reimbursements. Using the National Inpatient Survey data from HCUP from 2005 to 2010 and three methods to detect the presence of upcoding, our most conservative estimate is an additional three percent of reimbursement is attributable to upcoding. We find evidence of upcoding in government, non-profit, and for-profit hospitals. We find spillover effects of upcoding impacting not only Medicare payers, but also private insurance companies as well.

Physician Behavior under Prospective Payment Schemes-Evidence from Artefactual Field and Lab Experiments

Recent experimental studies analyze the behavior of physicians towards patients and find that physicians care for their own profit as well as patient benefit. In this paper, we extend the experimental analysis of the physician decision problem by adding a third party which represents the health insurance that finances medical service provision under a prospective payment scheme. Our results show that physicians take into account the payoffs of the third party, which can lead to underprovision of medical care. We conduct a laboratory experiment in neutral as well as in medical framing using students and medical doctors as subjects. Subjects in the medically framed experiments behave weakly and are more patient orientated in contrast to neutral framing. A sample of medical doctors exhibits comparable behavior to students with medical framing.

Birth weight, neonatal care, and infant mortality: Evidence from macrosomic babies

This study demonstrates that rule-of-thumb health treatment decision-making exists when assigning medical care to macrosomic newborns with an extremely high birth weight and estimates the short-run health return to neonatal care for infants at the high end of the birth weight distribution. Using a regression discontinuity design, we find that infants born with a birth weight above 5000 grams have a 2 percentage-point higher probability of admission to a neonatal intensive care unit and a 1 percentage-point higher probability of antibiotics receipt, compared to infants with a birth weight below 5000 grams. We also find that being born above the 5000-gram cutoff has a mortality-reducing effect: infants with a birth weight larger than 5000 grams face a 0.15 percentage-point lower risk of mortality in the first week and a 0.20 percentage-point lower risk of mortality in the first month, compared to their counterparts with a birth weight below 5000 grams. We do not find any evidence of changes in health treatments and mortality at macrosomic cutoffs lower than 5000 grams, which is consistent with the idea that such treatment decisions are guided by the higher expected morbidity and mortality risk associated with infants weighing more than 5000 grams.

Losing body weight for money: How provider-side financial incentives cause weight loss in Swiss low-birth-weight newborns

Facing steadily rising health care costs, Switzerland introduced a system of diagnosis-related groups (DRGs) for hospital payment in 2012 (SwissDRG) along with cost-efficiency benchmarking between hospitals. On the one hand, SwissDRG puts hospitals at financial risk and strengthens incentives for efficiency by setting a fixed price per case. On the other hand, hospitals are incentivized to game the system and exploit adverse incentives. We investigate hospitals' behavioral response to financial incentives in Swiss neonatology. First, we provide strong evidence for manipulations of reported birth weight among low-birth-weight newborns. Using a difference-in-difference-in-difference design, we find that 14-27% of birth weights are manipulated around specific birth weight cutoffs. Second, we find evidence of an upward-sloping supply curve of cheating, indicating that hospitals increasingly engage in fraudulent behavior as financial incentives increase. Our estimates indicate a supply-sided price elasticity of cheating between 0.16 and 0.52.

Do hospitals respond to decreasing prices by supplying more services?

Regulated prices are common in markets for medical care. We estimate the effect of changes in regulated reimbursement prices on volume of hospital care based on a reform of hospital financing in Germany. Uniquely, this reform changed the overall level of reimbursement-with increasing prices for some hospitals and decreasing prices for others-without directly affecting the relative prices for different groups of patients or types of treatment. Based on administrative data, we find that hospitals react to increasing prices by decreasing the service supply and to decreasing prices by increasing the service supply. Moreover, we find some evidence that volume changes for hospitals with different price changes are nonlinear. We interpret our findings as evidence for a negative income effect of prices on volume of care.

Buying efficiency: optimal hospital payment in the presence of double upcoding

BACKGROUND

With DRG payments, hospitals can game the system by 'upcoding' true patient's severity of illness. This paper takes into account that upcoding can be performed by the chief physician and hospital management, with the extent of the distortion depending on hospital's internal decision-making process. The internal decision making can be of the principal-agent type with the management as the principal and the chief physician as the agent, but the chief physicians may be able to engage in negotiations with management resulting in a bargaining solution.

RESULTS

In case of the principal-agent mechanism, the distortion due to upcoding is shown to accumulate, whereas in the bargaining case it is avoided at the level of the chief physician.

CONCLUSION

In the presence of upcoding it may be appropriate for the sponsor to design a payment system that fosters bargaining to avoid additional distortions even if this requires extra funding.

Effects of introducing a fee for inpatient overstays on the rate of death and readmissions across municipalities in Norway

The Norwegian healthcare coordination reform (Samhandlingsreformen) was implemented from January 1, 2012. In addition to providing municipalities with funding to strengthen their health infrastructure, it required municipalities to pay hospitals a daily fee for patients who, having been declared ready for discharge and in need of municipal health services, were not received by the municipalities on time. This study examines the effects of the reform on the rate of death and readmissions occurring within 60 days of hospitalization. We use aggregated municipal data for years 2009, 2010, 2012-2014 (N = 1646) for Norwegian patients (age 18+) hospitalized in the same years for COPD/asthma, heart failure, hip fracture, and stroke. We stratify our analyses of the municipal data by these patient groups. Our linear regression models test for moderated (interaction) effects whereby associations between the reform and the rate of death and readmissions vary by whether or not patients were classified as ready for discharge and in need of follow-up care in the municipality. The models adjust for municipal sociodemographic and health characteristics. We found no statistically significant moderated effects of the reform across the patient groups, except for patients with stroke (b = .027, SE = 0.109, p < .05). Specifically, compared to the pre-reform period (2009-2010), the post-reform period (2012-2014) was associated with a higher rate of readmissions at high predicted values of needing follow-up care. Even though our analyses of municipal data suggest that patients with stroke are vulnerable to the reform and its incentive scheme, there is no strong evidence overall to suggest that the Norwegian healthcare coordination reform is functioning in a manner that exacerbates the risk of death and readmissions.

Dishonesty in health care practice: A behavioral experiment on upcoding in neonatology

Dishonest behavior significantly increases the cost of medical care provision. Upcoding of patients is a common form of fraud to attract higher reimbursements. Imposing audit mechanisms including fines to curtail upcoding is widely discussed among health care policy-makers. How audits and fines affect individual health care providers' behavior is empirically not well understood. To provide new evidence on fraudulent behavior in health care, we analyze the effect of a random audit including fines on individuals' honesty by means of a novel controlled behavioral experiment framed in a neonatal care context. Prevalent dishonest behavior declines significantly when audits and fines are introduced. The effect is driven by a reduction in upcoding when being detectable. Yet upcoding increases when not being detectable as fraudulent. We find evidence that individual characteristics (gender, medical background, and integrity) are related to dishonest behavior. Policy implications are discussed.

Payment systems and hospital length of stay: a bunching-based evidence

Despite the huge attention on the long average hospital length of stay (LOS) in Japan, there are limited empirical studies on the impacts of the payment systems on LOS. In order to shed new light on this issue, we focus on the fact that reimbursement for hospital care is linked to the number of patient bed-days, where a "day" is defined as the period from one midnight to the next. This "midnight-to-midnight" definition may incentivize health care providers to manipulate hospital acceptance times in emergency patients, as patients admitted before midnight would have an additional day for reimbursement when compared with those admitted after midnight. We test this hypothesis using administrative data of emergency transportations in Japan from 2008 to 2011 (N = 2,146,498). The results indicate that there is a significant bunching in the number of acceptances at the emergency hospital around midnight; the number heaps a few minutes before midnight, but suddenly drops just after midnight. Given that the occurrence of emergency episode is random and the density is smooth during nighttime, bunching in the number of hospital acceptances around midnight suggests that hospital care providers shift the hospital acceptance times forward by hurrying-up to accept the patients. This manipulation clearly leads to longer LOS by one bed-day. In addition, the manipulation is observed in the prefectures where private hospitals mainly provide emergency medical services, suggesting hospital ownership is associated with the manipulation of hospital acceptance time.

Qualitative study of cardiologists’ perceptions of factors influencing clinical practice decisions

Background

Healthcare costs are increasing in the USA and Canada and a substantial portion of health spending is devoted to services that do not improve health outcomes. Efforts to reduce waste by adopting evidence-based clinical practice guideline recommendations have had limited success. We sought insight into improving health system efficiency through understanding cardiologists’ perceptions of factors that influence clinical decision-making.

Methods

In this descriptive qualitative study, we conducted in-depth interviews with 18 American and 3 Canadian cardiologists. We used conventional content analysis including inductive and deductive approaches for data analysis and mapped findings to the ecological systems framework.

Results

Physicians reported that major determinants of practice included interpersonal interactions with peers, patients and administrators; financial incentives and system factors. Patients’ insurance status represented an important consideration for some cardiologists. Other major influences included time constraints, fear of litigation (less prominent in Canada), a sense that their obligation was never to miss any underlying pathology, and patient demands. The need to bring income into their health system influenced American cardiologists’ practice; personal income implications influenced Canadian cardiologists’ practice. Cardiologists reported that knowledge limitations and logistical challenges limit their ability to assist patients with cost considerations. All these considerations were more influential than guidelines; some cardiologists expressed a high level of scepticism regarding guidelines.

Conclusions

Clinical decision-making by cardiologists is shaped by individual, interpersonal, organisational, environmental, financial and sociopolitical influences and only to a limited extent by guideline recommendations. Successful strategies to achieve efficient, evidence-based care will require addressing socioecological influences on decision-making.

A scoping review of empirical evidence on the impacts of the DRG introduction in Germany and Switzerland

CONTEXT

Germany and Switzerland have introduced diagnosis-related groups (DRGs) for hospital reimbursement. This scoping review aims to evaluate if empirical evidence exists on the effect of the DRG introduction.

METHODS

Medline via PubMed, Embase (Elsevier), CINAHL, PsychINFO, and Psyndex were systematically screened for studies from 2003 onwards using keywords-DRG, prospective payment system, and lump sum-in English, German, and French. Abstracts were screened for alignment with our inclusion criteria and classified as editorial/commentary, review, or empirical study. The full-text extraction included data on country, study design, collected data, study population, specialty, comparison group, and outcome measures.

RESULTS

Our literature search yielded 1944 references, of which 1405 references were included in the abstract screening after removal of duplicates. 135 articles were relevant to DRG, including 94 editorials/comments/reviews and 41 empirical articles from 36 different samples. The most frequently used outcome parameters were length of stay (12), reimbursement/cost (9), and case numbers (9).

CONCLUSIONS

Only a minority of identified articles (30.4%; 41 of 135) presented empirical data. This indicates that discussion on the topic is not totally evidence-based. The only common trend was a decrease in length of stay.

Is it good to be too light? Birth weight thresholds in hospital reimbursement systems

Birth weight manipulation has been documented in per-case hospital reimbursement systems, in which hospitals receive more money for otherwise equal newborns with birth weight just below compared to just above specific birth weight thresholds. As hospitals receive more money for cases with weight below the thresholds, having a (reported) weight below a threshold could benefit the newborn. Also, these reimbursement thresholds overlap with diagnostic thresholds that have been shown to affect the quantity and quality of care that newborns receive. Based on the universe of hospital births in Germany from the years 2005-2011, we investigate whether weight below reimbursement relevant thresholds triggers different quantity and quality of care. We find that this is not the case, suggesting that hospitals' financial incentives with respect to birth weight do not directly impact the care that newborns receive.

Plan responses to diagnosis-based payment: Evidence from Germany's morbidity-based risk adjustment

Many competitive health insurance markets adjust payments to participating health plans according to their enrollees' risk - including based on diagnostic information. We investigate responses of German health plans to the introduction of morbidity-based risk adjustment in the Statutory Health Insurance in 2009, which triggers payments based on "validated" diagnoses by providers. Using the regulator's data from office-based physicians, we estimate a difference-in-difference analysis of the change in the share and number of validated diagnoses for ICD codes that are inside or outside the risk adjustment but are otherwise similar. We find a differential increase in the share of validated diagnoses of 2.6 and 3.6 percentage points (3-4%) between 2008 and 2013. This increase appears to originate from both a shift from not-validated toward validated diagnoses and an increase in the number of such diagnoses. Overall, our results indicate that plans were successful in influencing physicians' coding practices in a way that could lead to higher payments.

A New Strategy to Evaluate Technical Efficiency in Hospitals Using Homogeneous Groups of Casemix : How to Evaluate When There is Not DRGs?

The public health system has restricted economic resources. Because of that, it is necessary to know how the resources are being used and if they are properly distributed. Several works have applied classical approaches based in Data Envelopment Analysis (DEA) and Stochastic Frontier Analysis (SFA) for this purpose. However, if we have hospitals with different casemix, this is not the best approach. In order to avoid biases in the comparisons, other works have recommended the use of hospital production data corrected by the weights from Diagnosis Related Groups (DRGs), to adjust the casemix of hospitals. However, not all countries have this tool fully implemented, which limits the efficiency evaluation. This paper proposes a new approach for evaluating the efficiency of hospitals. It uses a graph-based clustering algorithm to find groups of hospitals that have similar production profiles. Then, DEA is used to evaluate the technical efficiency of each group. The proposed approach is tested using the production data from 2014 of 193 Chilean public hospitals. The results allowed to identify different performance profiles of each group, that differs from other studies that employs data from partially implemented DRGs. Our results are able to deliver a better description of the resource management of the different groups of hospitals. We have created a website with the results ( bioinformatic.diinf.usach.cl/publichealth ). Data can be requested to the authors.