Evaluation of the impact of prospective payment systems on cholecystectomy: A systematic review and meta-analysis

This systematic review and meta-analysis aimed to evaluate the impact of prospective payment systems (PPSs) on cholecystectomy. A comprehensive literature review was conducted, examining studies published until December 2023. The review process focused on identifying research across major databases that reported critical outcomes such as length of stay (LOS), mortality, complications, admissions, readmissions, and costs following PPS for cholecystectomy. The studies were specifically selected for their relevance to the impact of PPS or the transition from fee-for-service (FFS) to PPS. The study analyzed six papers, with three eligible for meta-analysis, to assess the impact of the shift from FFS to PPS in laparoscopic and open cholecystectomy procedures. Our findings indicated no significant changes in LOS and mortality rates following the transition from FFS to PPS. Complication rates varied and were influenced by the diagnosis-related group categorization and surgeon cost profiles under episode-based payment. There was a slight increase in admissions and readmissions, and mixed effects on hospital costs and financial margins, suggesting varied responses to PPS for cholecystectomy procedures. The impact of PPS on cholecystectomy is nuanced and varies across different aspects of healthcare delivery. Our findings indicate a need for adaptable, patient-centered PPS models that balance economic efficiency with high-quality patient care. The study emphasizes the importance of considering specific surgical procedures and patient demographics in healthcare payment reforms.

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.

Upcoding in medicare: where does it matter most?

Upcoding in Medicare has been a topic of interest to economists and policy makers for nearly 40 years. While upcoding is generally understood as "billing for services at higher level of complexity than the service actually pro- vided or documented," it has a wide range of definitions within the literature. This is largely because the financial incentives across programs and aspects under the coding control of billing specialists and providers are different, and have evolved substantially over time, as has the published literature. Arguably, the primary importance of analyzing upcoding in different parts of Medicare is to inform policy makers on the magnitude of the process and to suggest approaches to mitigate the level of upcoding. Financial estimates for upcoding in traditional Medicare (Medicare Parts A and B), are highly variable, in part reflecting differences in methodology for each of the services covered. To resolve this variability, we used summaries of audit data from the Comprehensive Error Rate Testing program for the period 2010-2019. This program uses the same methodology across all forms of service in Medicare Parts A and B, allowing direct comparisons of upcoding magnitude. On average, upcoding for hospitalization under Part A represents $656 million annually (or 0.53% of total Part A annual expenditures) during our sample period, while up- coding for physician services under Part B is $2.38 billion annually (or 2.43% of Part B annual expenditures). These numbers compare to the recent consistent estimates from multiple different entities putting upcoding in Medicare Part C at $10-15 billion annually (or approximately 2.8-4.2% of Part C annual expenditures). Upcoding for hospitalization under Medicare Part A is small, relative to overall upcoding expenditures.

Does prospective payment influence quality of care? A systematic review of the literature

In the light of rising health expenditures, the cost-efficient provision of high-quality inpatient care is on the agenda of policy-makers worldwide. In the last decades, prospective payment systems (PPS) for inpatient care were used as an instrument to contain costs and increase transparency of provided services. It is well documented in the literature that prospective payment has an impact on structure and processes of inpatient care. However, less is known about its effect on key outcome indicators of quality of care. In this systematic review, we synthesize evidence from studies investigating how financial incentives induced by PPS affect indicators of outcome quality domains of care, i.e. health status and user evaluation outcomes. We conduct a review of evidence published in English, German, French, Portuguese and Spanish language produced since 1983 and synthesize results of the studies narratively by comparing direction of effects and statistical significance of different PPS interventions. We included 64 studies, where 10 are of high, 18 of moderate and 36 of low quality. The most commonly observed PPS intervention is the introduction of per-case payment with prospectively set reimbursement rates. Abstracting evidence on mortality, readmission, complications, discharge disposition and discharge destination, we find the evidence to be inconclusive. Thus, claims that PPS either cause great harm or significantly improve the quality of care are not supported by our findings. Further, the results suggest that reductions of length of stay and shifting treatment to post-acute care facilities may occur in the course of PPS implementations. Accordingly, decision-makers should avoid low capacity in this area.

The Effect of a New Payment System on Physiotherapeutic Management of Patients With Low Back Pain in Primary Care

OBJECTIVE

To evaluate differences regarding the number of treatment sessions, costs, and outcomes (including relapses) between a regular payment-per-session system and the recently introduced product payment system.

DESIGN

Prospective cohort study.

SETTING

Dutch physical therapy practices in primary care over a 2-year period.

PARTICIPANTS

16,103 patients with low back pain (LBP).

INTERVENTION

The new product payment system is compared with the regular payment-per-session system.

MAIN OUTCOME MEASURES

Pain, disability, recovery, number of physical therapy sessions, therapy duration, costs (per episode), and LBP relapse.

RESULTS

At baseline, we found greater pain and disability scores associated with an increased risk profile in both payment systems. With regard to the payment systems, we found greater costs (€283.8 vs €210.8) and a greater percentage of relapse (4.5% vs 2.8%) for the product payment system compared with the payment-per-session system. Comparing the 2 payment systems within each risk strata, we found no significant differences, except for a decrease in pain in the medium-risk stratum. Concerning the therapy characteristics, we found that in the payment-per-session group, the therapy took 6 days longer for low-risk patients (median 27 vs 21 days) and 7 days shorter for high-risk patients (median 42 vs 49 days) compared with the product payment group. Moreover, the mean number of sessions in the payment-per-session group was greater for low-risk patients (5.4 vs 4.8 sessions) and lower for high-risk patients (7.7 vs 8.1 sessions) compared with the payment-per-session group. Finally, the costs were significantly greater in all strata of the product payment group compared with the payment-per-session group.

CONCLUSIONS

The 2 payment systems are largely comparable regarding patient outcomes, therapy duration, and treatment sessions. Both the average cost per patient per LBP episode and the number of relapses in the product payment system are statistically significantly greater than in the payment-per-session system.

The sensitivity of hospital coding to prices: evidence from Indonesia

This study examines a newly introduced DRG system in Indonesia. We use secondary data for 2015 and 2017 from Jaminan Kesehatan Nasional (JKN), a patient level dataset for Indonesia created in 2014 to record public and private hospitals' claims to the national health insurance system to investigate whether there is an association between changes in tariffs paid and the severity of inpatient activity recorded in hospitals. We find a consistent small, positive and statistically significant correlation between changes in tariffs and changes in concentration of activity, indicating discretionary but limited coding behaviour by hospitals. The results indicate that reducing price differentials may mitigate discretionary coding, but that the benefits of this are limited and need to be compared to the potential risk of having to rebase all prices upwards.

Predicting diagnostic coding in hospitals: individual level effects of price incentives

The purpose of this paper is to test if implicit price incentives influence the diagnostic coding of hospital discharges. We estimate if the probability of being coded as a complicated patient was related to a specific price incentive. This paper tests empirically if upcoding can be linked to shifts in patient composition through proxy measures such as age composition, length of stay, readmission rates, mortality- and morbidity of patients. Data about inpatient episodes in Norway in all specialized hospitals in the years 1999-2012 were collected, N = 11 065 330. We examined incentives present in part of the hospital funding system. First, we analyse trends in the proxy measures of diagnostic upcoding: can hospital behavioural changes be seen over time with regards to age composition, readmission rates, length of stay, comorbidity and mortality? Secondly, we examine specific patient groups to see if variations in the price incentive are related to probability of being coded as complicated. In the first years (1999-2003) there was an observed increase in the share of episodes coded as complicated, while the level has become more stable in the years 2004-2012. The analysis showed some indications of upcoding. However, we found no evidence of widespread upcoding fuelled by implicit price incentive, as other issues such as patient characteristics seem to be more important than the price differences. This study adds to previous research by testing individual level predictions. The added value of such analysis is to have better case mix control. We observe the presence of price effects even at individual level.

Identifying client characteristics to predict homecare use more accurately: a Delphi-study involving nurses and homecare purchasing specialists

Background

Case-mix based prospective payment of homecare is being implemented in several countries to work towards more efficient and client-centred homecare. However, existing models can only explain a limited part of variance in homecare use, due to their reliance on health- and function-related client data. It is unclear which predictors could improve predictive power of existing case-mix models. The aim of this study was therefore to identify relevant predictors of homecare use by utilizing the expertise of district nurses and health insurers.

Methods

We conducted a two-round Delphi-study according to the RAND/UCLA Appropriateness Method. In the first round, participants assessed the relevance of eleven client characteristics that are commonly included in existing case-mix models for predicting homecare use, using a 9-Point Likert scale. Furthermore, participants were also allowed to suggest missing characteristics that they considered relevant. These items were grouped and a selection of the most relevant items was made. In the second round, after an expert panel meeting, participants re-assessed relevance of pre-existing characteristics that were assessed uncertain and of eleven suggested client characteristics. In both rounds, median and inter-quartile ranges were calculated to determine relevance.

Results

Twenty-two participants (16 district nurses and 6 insurers) suggested 53 unique client characteristics (grouped from 142 characteristics initially). In the second round, relevance of the client characteristics was assessed by 12 nurses and 5 health insurers. Of a total of 22 characteristics, 10 client characteristics were assessed as being relevant and 12 as uncertain. None was found irrelevant for predicting homecare use. Most of the client characteristics from the category ‘Daily functioning’ were assessed as uncertain. Client characteristics in other categories – i.e. ‘Physical health status’, ‘Mental health status and behaviour’, ‘Health literacy’, ‘Social environment and network’, and ‘Other’ – were more frequently considered relevant.

Conclusion

According to district nurses and health insurers, homecare use could be predicted better by including other more holistic predictors in case-mix classification, such as on mental functioning and social network. The challenge remains, however, to operationalize the new characteristics and keep stakeholders on board when developing and implementing case-mix classification for homecare prospective payment.

Supplementary Information

The online version contains supplementary material available at 10.1186/s12913-022-07733-9.

Considering the role of context when implementing government policies in hospitals: introduction of a prospective payment system for psychiatry

PURPOSE

The context in which an innovation is implemented is an important and often neglected mediator of change. A prospective payment system (PPS) for psychiatric and psychosomatic facilities with major implications for inpatient psychiatric care in Germany was implemented from 2013 to 2017. This study aims to examine the determinants of implementation of this government policy using the Diffusion of Innovations theory and consider the role of context.

DESIGN/METHODOLOGY/APPROACH

An exploratory case study was conducted in two wards of a psychiatric hospital in Germany: geriatric psychiatry (GerP) and general psychiatry (GenP). Fifteen interviews were conducted with different occupational groups and analyzed in-depths. Routine hospital data were analyzed for delimiting the two contexts.

FINDINGS

Routine hospital data show a higher day-mix index (1.08 vs. 0.94) in the GerP context and a very different structure regarding PPS groups, indicating a higher patient complexity. Two types of factors influencing implementation were identified: Context-independent factors included social separation between nurses and doctors, poor communication behavior between the groups and a lack of conveying information about the underlying principles of the PPS. Context-dependent factors included compatibility of the new requirements with existing routines and the relative advantage of the PPS, which were both perceived to be lower in the GerP context.

PRACTICAL IMPLICATIONS

Depending on the patient characteristics in the specific context, compatibility with existing routines should be ensured when implementing. Clear communication of the underlying principles and reduction of organizational and communicative barriers between professional groups are crucial success factors for implementing such innovations.

ORIGINALITY/VALUE

This study shows how a diffusion process takes place in an organization even after the organization adopts an innovation. The authors could show how contextual differences in terms of patient characteristics result in different determinants of implementation from the views of the employees affected by the innovation.

Assessing the performance of a method for case-mix adjustment in the Korean Diagnosis-Related Groups (KDRG) system and its policy implications

Background

To evaluate the performance of the patient clinical complexity level (PCCL) mechanism, which is the patient-level complexity adjustment factor within the Korean Diagnosis-Related Groups (KDRG) patient classification system, in explaining the variation in resource consumption within age adjacent diagnosis-related groups (AADRGs).

Methods

We used the inpatient claims data from a public hospital in Korea from 1 January 2017 to 30 June 2019, with 18 846 claims and 138 AADRGs. The differences in the total average payment between the four PCCL levels for each AADRG was tested using ANOVA and Duncan’s post hoc test. The three patterns of differences with R-squared were as follows: the PCCL reflected the complexity well (valid); the average payment for PCCL 2, 3, and 4 was greater than PCCL 0 (partially valid); the PCCL did not reflect the complexity (not valid).

Results

There were 9 (6.52%), 26 (18.84%), and 103 (74.64%) ADRGs included in the valid, partially valid, and not valid categories, respectively. The average R-squared values were 32.18, 40.81, and 35.41%, respectively, with an average R-squared for all patterns of 36.21%.

Conclusions

Adjustment using the PCCL in the KDRG classification system exhibited low performance in explaining the variation in resource consumption within AADRGs. As the KDRG classification system is used for reimbursement under the new DRG-based prospective payment system (PPS) pilot project, with plans for expansion, there should be an overall review of the validity of the complexity and rationality of using the KDRG classification system.

Supplementary Information

The online version contains supplementary material available at 10.1186/s12961-021-00739-5.

A Medicaid Alternative Payment Model Program In Oregon Led To Reduced Volume Of Imaging Services

The patient-centered medical home model aspires to fundamentally restructure care processes, but a volume-based payment system may hinder such transformations. In 2013 Oregon's Medicaid program changed its reimbursement of traditional primary care services for selected community health centers (CHCs) from a per visit to a per patient rate. Using Oregon claims data, we analyzed the price-weighted volume of care for five service areas: traditional primary care services, including imaging, tests, and procedures; other services provided by CHCs that were carved out from the payment reform; emergency department visits; inpatient services; and other services of non-CHC providers. We further subdivided traditional primary care services using Berenson-Eggers Type of Service categories of care. We compared participating and nonparticipating CHCs in Oregon before and after the payment model was implemented. The payment reform was associated with a 42.4 percent relative reduction in price-weighted traditional primary care services, driven fully by decreased use of imaging services. Other outcomes remained unaffected. Oregon's initiative could provide lessons for other states interested in using payment reform to advance the patient-centered medical home model for the Medicaid population.

Do discontinuities in marginal reimbursement affect inpatient psychiatric care in Germany?

This paper examines the behaviour of mental health care providers in response to marginal payment incentives induced by a discontinuous per diem reimbursement schedule with varying tariff rates over the length of stay. The analyses use administrative data on 12,627 cases treated in 82 psychiatric hospitals and wards in Germany. We investigate whether substantial reductions in marginal reimbursement per inpatient day led to strategic discharge behaviour once a certain length of stay threshold is exceeded. The data do not show gaps and bunches at the duration of treatment when marginal reimbursement decreases. Using logistic regression models, we find that providers did not react to discontinuities in marginal reimbursement by significantly reducing inpatient length of stay around the threshold. These findings are robust in terms of different model specifications and subsamples. The results indicate that if regulators aim to set incentives to decrease LOS, this might not be achieved by cuts in reimbursement over LOS.

Prospective payment system and racial/ethnic disparities: a national retrospective observational study in anaemia complication among end-stage renal disease patients in the US

Background

A series of policy changes in 2011 altered reimbursement arrangements and guidance on use of erythropoiesis-stimulating agents for end-stage renal disease (ESRD) patients with anaemia in the US. While the policy changes were principally directed at care delivered in an outpatient setting, these had the potential to affect inpatient care also. This study used HCUP-NIS data (2008–2016) to examine trends in recorded anaemia among ESRD hospitalizations and analyse disparities in inpatient outcomes among ethnic groups following policy changes.

Methods

The International Classification of Diseases codes were used to identify ESRD admissions, recorded anaemia due to chronic kidney disease (CKD), and to generate an age-adjusted Deyo-Charlson comorbidity index. Linear splines with a knot placed at the time point of policy changes and multivariable logistic regression were used to examine the likelihood of recorded anaemia, adjusted for a range of socio-demographic and clinical covariates. Difference-in-difference analyses investigated the impact of policies on recorded anaemia. Other outcomes included hospital cost, mortality and place of discharge.

Results

The percentage of inpatient episodes with recorded anaemia arising from CKD increased from 26.2% in 2008 to 50.0% in 2016. Anaemia was more likely to be recorded as a complication of ESRD among minority ethnic groups and Native American admissions, in particular, (OR 1.20, 95%CI 1.15–1.25) relative to White American admissions; and these disparities widened following changes to reimbursement. Minorities were less likely to die in hospital and to be discharged to another healthcare facility, and (with the exception of Black American admissions) they were more expensive to treat.

Conclusions

Our findings provide evidence of an increase in recorded anaemia consistent with a shift of patients from outpatient to inpatient settings in the wake of changes to reimbursement enacted in 2011. In addition, the study highlights the existence of ethnic disparities that widened after the policy initiated reimbursement changes.

A systematic review of case-mix models for home health care payment: Making sense of variation

BACKGROUND

Case-mix based payment of health care services offers potential to contain expenditure growth and simultaneously support needs-based care provision. However, limited evidence exists on its application in home health care (HHC). Therefore, this study aimed to synthesize available international literature on existing case-mix models for HHC payment.

METHODS

We performed a systematic review of scientific literature, supplemented with grey literature. We searched for literature using six scientific databases, reference lists, expert consultation, and targeted websites. Data on study design, case-mix model attributes, and conclusions were extracted narratively.

RESULTS

Of 3303 references found, 22 scientific studies and 27 grey documents met eligibility criteria. Eight case-mix models for HHC were identified, from the US, Canada, New Zealand, Australia, and Germany. Three countries have implemented a case-mix model as part of a HHC payment system. Different combinations of in total 127 unique case-mix predictors are included across models to predict HHC use. Case-mix models also differ in targeted services, operationalization, and outcome measures and predictive power.

CONCLUSIONS

Case-mix based payment is not yet widely used within HHC. Multiple varieties were found between HHC case-mix models, and no one best form of a model seems to exist. Even though varieties are partly inevitable due to country-specific contexts, developing a shared vision in case-mix model attributes would be key to achieving efficient, needs-based HHC.

[Risk sharing contracts in the national health care system: Perceptions of health care professionals]

OBJECTIVE

Risk-sharing contracts (RSC) present a novel management tool, which link the payment to the pharmaceutical company to health outcomes. The objective of this work was to know the perception of health professionals about the utility of these agreements in the Spanish National Health System.

METHODS

A questionnaire was designed to conduct a series of semi-structured interviews with hospital pharmacy, laboratory and oncology professionals from Spanish hospitals in Madrid, Aragón, Castilla-La Mancha, Castilla y León, Cataluña, La Rioja, País Vasco and Navarra. The selection criteria was for convenience. The interview period was from April to November 2017. A qualitative analysis was performed based on the responses from 14 interviews.

RESULTS

All the surveyed affirmed that the CRCs allow to improve the economic and administrative management of the hospital, emphasizing as main advantages the budgetary control, the obtaining of funding and the savings possibilities. CRCs are perceived (13 of 14 respondents) as agreements with positive health implications because they increased the portfolio of treatments and had greater efficacy. The need for CRCs to register patients, involved monitoring and control, also contributed to the improvement of their health. In addition, CRCs were believed (8 out of 14 respondents) to facilitate the introduction of personalized medicine (MP) as both depend on diagnostic tests, one for screening reasons (MP) and the other for obtain clinical evidences that improve economic outcomes (CRC). However, it was considered that signing the CRCs entails the need to modify certain regulations (5 out of 14 respondents) as well as to increase the number of staff to handle bureaucratic tasks and to increase laboratory tests, which can complicate health management.

CONCLUSIONS

Qualitative social research techniques have proven to be useful for gathering information on a new topic and understanding the perception of the advantages and disadvantages of CRCs, as well as their association with the MP. In addition, synergies were detected between the CRCs and the MP. Respondents had positive opinions on CRCs about its application, although work must be done in order to improve the normative and organizational context so that the additional complexity that they incorporate does not constitute an obstacle to extend its use.

Competition in the Dutch hospital sector: an analysis of health care volume and cost

This paper evaluates the impact of market competition on health care volume and cost. At the start of 2005, the financing system of Dutch hospitals started to be gradually changed from a closed-end budgeting system to a non-regulated price competitive prospective reimbursement system. The gradual implementation of price competition is a 'natural experiment' that provides a unique opportunity to analyze the effects of market competition on hospital behavior. We have access to a unique database, which contains hospital discharge data of diagnosis treatment combinations (DBCs) of individual patients, including detailed care activities. Difference-in-difference estimates show that the implementation of market-based competition leads to relatively lower total costs, production volume and number of activities overall. Difference-in-difference estimates on treatment level show that the average costs for outpatient DBCs decreased due to a decrease in the number of activities per DBC. The introduction of market competition led to an increase of average costs of inpatient DBCs. Since both volume and number of activities have not changed significantly, we conclude that the cost increase is likely the result of more expensive activities. A possible explanation for our finding is that hospitals look for possible efficiency improvements in predominantly outpatient care products that are relatively straightforward, using easily analyzable technologies. The effects of competition on average cost and the relative shares of inpatient and outpatient treatments on specialty level are significant but contrary for cardiology and orthopedics, suggesting that specialties react differently to competitive incentives.

Australian diagnosis related groups: Drivers of complexity adjustment

BACKGROUND

In undertaking a major revision to the Australian Refined Diagnosis Related Group (ARDRG) classification, we set out to contrast Australia's approach to using data on additional (not principal) diagnoses with major international approaches in splitting base or Adjacent Diagnosis Related Groups (ADRGs).

METHODS

Comparative policy analysis/narrative review of peer-reviewed and grey literature on international approaches to use of additional (secondary) diagnoses in the development of Australian and international DRG systems.

ANALYSIS

European and US approaches to characterise complexity of inpatient care are well-documented, providing useful points of comparison with Australia's. Australia, with good data sources, has continued to refine its national DRG classification using increasingly sophisticated approaches. Hospital funders in Australia and in other systems are often under pressure from provider groups to expand classifications to reflect clinical complexity. DRG development in most healthcare systems reviewed here reflects four critical factors: these socio-political factors, the quality and depth of the coded data available to characterise the mix of cases in a healthcare system, the size of the underlying population, and the intended scope and use of the classification. Australia's relatively small national population has constrained the size of its DRG classifications, and development has been concentrated on inpatient care in public hospitals.

DISCUSSION AND CONCLUSIONS

Development of casemix classifications in health care is driven by both technical and socio-political factors. Use of additional diagnoses to adjust for patient complexity and cost needs to respond to these in each casemix application.

Early outcome of the Korean Diagnosis-Related Groups payment system for appendectomy

Purpose

The implementation of the Korean diagnosis-related groups (DRG) payment system has been recently introduced in selected several diseases including appendectomy in Korea. Here, we report the early outcomes with regard to clinical aspects and medical costs of the Korean DRG system for appendectomies in Seoul Metropolitan Government - Seoul National University Boramae Medical Center throughout comparing before and after introduction of DRG system.

Methods

The DRG system was applied since January 2013 at our institute. After the DRG system, we strategically designed and applied our algorithm for the treatment of probable appendicitis. We reviewed the patients who were treated with a procedure of appendectomy for probable appendicitis between July 2012 and June 2013, divided two groups based on before and after the application of DRG system, and compared clinical outcomes and medical costs.

Results

Total 416 patients were included (204 patients vs. 212 patients in the group before vs. after DRG). Shorter hospital stays (2.98 ± 1.77 days vs. 3.82 ± 1.84 days, P < 0.001) were found in the group after DRG. Otherwise, there were no significant differences in the perioperative outcomes and medical costs including costs for first hospitalization and operation, costs for follow-up after discharge, frequency of visits of out-patient's clinic or Emergency Department or rehospitalization.

Conclusion

In the Korean DRG system for appendectomy, there were no significant differences in perioperative outcomes and medical costs, except shorter hospital stay. Further studies should be continued to evaluate the current Korean DRG system for appendectomy and further modifications and supplementations are needed in the future.

Supplier-induced demand for newborn treatment: evidence from Japan

We estimate the degree of supplier-induced demand for newborn treatment by exploiting changes in reimbursement arising from the introduction of the partial prospective payment system (PPS) in Japan. Under the partial PPS, neonatal intensive care unit (NICU) utilization became relatively more profitable than other procedures, since it was excluded from prospective payments. We find that hospitals have responded to PPS adoption by increasing NICU utilization and by more frequently manipulating infants' reported birth weights which in large part determine their maximum allowable stay in the NICU. This induced demand substantially increases the reimbursements received by hospitals.

Acute myocardial infarction and diagnosis-related groups: patient classification and hospital reimbursement in 11 European countries

AIMS

As part of the diagnosis related groups in Europe (EuroDRG) project, researchers from 11 countries (i.e. Austria, England, Estonia, Finland, France, Germany, Ireland, Netherlands, Poland, Spain, and Sweden) compared how their DRG systems deal with patients admitted to hospital for acute myocardial infarction (AMI). The study aims to assist cardiologists and national authorities to optimize their DRG systems.

METHODS AND RESULTS

National or regional databases were used to identify hospital cases with a primary diagnosis of AMI. Diagnosis-related group classification algorithms and indicators of resource consumption were compared for those DRGs that individually contained at least 1% of cases. Six standardized case vignettes were defined, and quasi prices according to national DRG-based hospital payment systems were ascertained. European DRG systems vary widely: they classify AMI patients according to different sets of variables into diverging numbers of DRGs (between 4 DRGs in Estonia and 16 DRGs in France). The most complex DRG is valued 11 times more resource intensive than an index case in Estonia but only 1.38 times more resource intensive than an index case in England. Comparisons of quasi prices for the case vignettes show that hypothetical payments for the index case amount to only €420 in Poland but to €7930 in Ireland.

CONCLUSIONS

Large variation exists in the classification of AMI patients across Europe. Cardiologists and national DRG authorities should consider how other countries' DRG systems classify AMI patients in order to identify potential scope for improvement and to ensure fair and appropriate reimbursement.

Breast cancer surgery and diagnosis-related groups (DRGs): patient classification and hospital reimbursement in 11 European countries

Researchers from eleven countries (i.e. Austria, England, Estonia, Finland, France, Germany, Ireland, Netherlands, Poland, Spain, and Sweden) compared how their DRG systems deal with breast cancer surgery patients. DRG algorithms and indicators of resource consumption were assessed for those DRGs that individually contain at least 1% of all breast cancer surgery patients. Six standardised case vignettes were defined and quasi prices according to national DRG-based hospital payment systems were ascertained. European DRG systems classify breast cancer surgery patients according to different sets of classification variables into three to seven DRGs. Quasi prices for an index case treated with partial mastectomy range from €577 in Poland to €5780 in the Netherlands. Countries award their highest payments for very different kinds of patients. Breast cancer specialists and national DRG authorities should consider how other countries' DRG systems classify breast cancer patients in order to identify potential scope for improvement and to ensure fair and appropriate reimbursement.