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Diagnosis Related Groups in Europe:Moving towards transparency, efficiencyand quality in hospitals
17 November 2011 DRGs in Europe: Moving towards transparency, e iciency and !ua"ity in #ospita"s 1
Reinhard Busse, Prof. Dr. med. MPH FFPHDepartment o $ea"t# %are Management, &er"in 'niversity o (ec#no"ogy
) European *bservatory on $ea"t# +ystems and o"icieson be#a" o t#e EuroDRG team
Understanding DRGs in Europe the EuroDRG project
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po!ic" #uestion in the $th EU Frame%or& Programme'-#y do costs o #ea"t# services di er among E' countries att#e micro "eve".
Ho% ( got interested in DRGs )*++*
6,0007,0008,0009,000
NHS
2
01,0002,0003,0004,000
,
Cataract Hip Knee
UK privateFrance
The first nine patients sent toFrance by the English NHS
(not shown: the 40 journalistswho accompanied them)
Are these data realistic?Are they representative?
How can the differences be explained?DRGs in Europe: Moving towards transparency, e iciency and !ua"ity in #ospita"s17 November 2011
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5916,455599,30
7450,22
5369,53
8282,36
6225,55
7616,89
9374,21
6000,00
7000,00
8000,00
9000,00
10000,00
in
Using -+ standardised /ignettes0 acrosscountries
E.g. Acute myocardial infarction
395,97
1025,76
1861,02
2465,322866,36
5013,64
308,88592,15
2236,40
2868,16
483,05
1415,79
2541,845 2733,38
1181,531282,55
3720,88
4384,724161,15
0,00
1000,00
2000,00
3000,00
4000,00
5000,00
Hungary
(N=2)
Poland
(N=5)
Spain
(N=5)
Denmark
(N=3)
Germany
(N=13)
England
(N=3)
France
(N=3)
Netherlands
(N=6)
Italy
(N=5)
//DRGs in Europe: Moving towards transparency, e iciency and !ua"ity in #ospita"s17 November 2011
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5916,455599,30
7450,22
5369,53
8282,36
6225,55
7616,89
9374,21
6000,00
7000,00
8000,00
9000,00
10000,00in Acute myocardial infarctionpatient /aria1!es
medica! and managementdecision /aria1!es
gender, age,main diagnosis, ot#er
diagnoses, severity
Open question 1: How much do
395,97
1025,76
1861,02
2465,322866,36
5013,64
308,88592,15
2236,40
2868,16
483,05
1415,79
2541,845 2733,38
1181,531282,55
3720,88
4384,724161,15
0,00
1000,00
2000,00
3000,00
4000,00
5000,00
Hungary
(N=2)
Poland
(N=5)
Spain
(N=5)
Denmark
(N=3)
Germany
(N=13)
England
(N=3)
France
(N=3)
Netherlands
(N=6)
Italy
(N=5)
mi and intensity o procedures,tec#no"ogies and #uman
resource use
e g si3e, teac#ing status4urbanity4 wage "eve"
structura! /aria1!es onhospita!2 regiona!2
nationa! !e/e!
variation (and do DRG systemstake them into account)?
DRGs in Europe: Moving towards transparency, e iciency and !ua"ity in #ospita"s17 November 2011
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5916,455599,30
7450,22
5369,53
8282,36
6225,55
7616,89
9374,21
6000,00
7000,00
8000,00
9000,00
10000,00in
none mixed all
Acute myocardial infarction:Hospitals performing PCI (PTCA/ Stenting)
395,97
1025,76
1861,02
2465,322866,36
5013,64
308,88592,15
2236,40
2868,16
483,05
1415,79
2541,845 2733,38
1181,531282,55
3720,88
4384,724161,15
0,00
1000,00
2000,00
3000,00
4000,00
5000,00
Hungary
(N=2)
Poland
(N=5)
Spain
(N=5)
Denmark
(N=3)
Germany
(N=13)
England
(N=3)
France
(N=3)
Netherlands
(N=6)
Italy
(N=5)
> factor 4:value for money?
5DRGs in Europe: Moving towards transparency, e iciency and !ua"ity in #ospita"s17 November 2011
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5916,455599,30
7450,22
5369,53
8282,36
6225,55
7616,89
9374,21
6000,00
7000,00
8000,00
9000,00
10000,00in Acute myocardial infarction
none mixed
Open question 2: If costs differ so
all
Acute myocardial infarction:Hospitals performing PCI (PTCA/ Stenting)
395,97
1025,76
1861,02
2465,322866,36
5013,64
308,88592,15
2236,40
2868,16
483,05
1415,79
2541,845 2733,38
1181,531282,55
3720,88
4384,724161,15
0,00
1000,00
2000,00
3000,00
4000,00
5000,00
Hungary
(N=2)
Poland
(N=5)
Spain
(N=5)
Denmark
(N=3)
Germany
(N=13)
England
(N=3)
France
(N=3)
Netherlands
(N=6)
Italy
(N=5)
muc w t treatment, w at a outthe quality of care?
6DRGs in Europe: Moving towards transparency, e iciency and !ua"ity in #ospita"s17 November 2011
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8000
10000
12000
t ( E u r o s
)
Hip implant
Hospitals in NL
0
2000
4000
6000
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
Total cost (Euros)
R e
i m b u r s e m
e
DenmarkEnglandFranceGermanyHungary
ItalyNetherlandsPolandSpain
77DRGs in Europe: Moving towards transparency, e iciency and !ua"ity in #ospita"s17 November 2011 7
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8000
10000
12000
t ( E u r o s
)
Profit-making plausible through comparatively low case complexity
Open question 3: If costs differ so muchwithin countries, why do countriesdevelo their own DRG s stems
Hip implant
0
2000
4000
6000
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
Total cost (Euros)
R e
i m b u r s e m
e
DenmarkEnglandFranceGermanyHungary
ItalyNetherlandsPolandSpain
(rather than a European one)?
What data would be necessary for this?
DRGs in Europe: Moving towards transparency, e iciency and !ua"ity in #ospita"s17 November 2011
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For the new project, we then chose to look atDRGs specifically. These are introduced to get acommon currency of hospital activity for
transparency efficiency benchmarking &performance measurement (protect/ improve quality),
budget allocation (or division among purchasers), planning of capacities, payment ( efficiency)
Exact reasons, expectations and DRG usage differamong countries due to (de)centralisation, onevs. multiple payers, public vs. mixed ownership.
8DRGs in Europe: Moving towards transparency, e iciency and !ua"ity in #ospita"s17 November 2011
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SuomiFinland
Countries covered by EuroDRG project17 November 2011 10DRGs in Europe: Moving towards transparency, e iciency andua"it in #os ita"s
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3hat did %e do4
Phase ( )5 session ( toda"$ow do DRG system in Europe wor9. -#y and w#enimp"emented. $ow does patient c"assi ication wor9.
-#ere do data come rom. 'ni orm or regiona""y adapted.$ow o ten updated. mpact on e iciency and !ua"ity. ;
Phase (( )5 session (( toda"
$ow do DRG systems per orm. (o empirica""y ana"yse t#at,we c#ose 10 countrycomparisons o actua" c"assi ication, reimbursement, actorse p"aining cost variation, cost>!ua"ity re"ations#ip ;
Phase ((( )5 this afternoon%onc"usions or po"icy>ma9ers wit#in and beyond Europeancountries ;
17 November 2011 11DRGs in Europe: Moving towards transparency, e iciency and !ua"ity in #ospita"s
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E c"uded costs?e g or in rastructure4in 0.'. also #-ysician ser!ices @
ayments or non>patient care activities?e g teac#ing, researc#, emergency avai"abi"ity@
ayments or patients not c"assi ied into DRG systeme out atients, da cases, s c#iatr , re#abi"itation
For %hat t"pes of acti/ities4 :cope of DRGs )(
DRG61ased case pa"ments,DRG61ased 1udget a!!ocation
?possib"y adKusted or out"iers, !ua"ity etc @
*t#er types o payments or DRG>c"assi ied patients?e g g"oba" budgets, ee> or>service@
Additiona" payments or speci ic activities or DRG>c"assi ied patients ?e g e pensive drugs, innovations@,
possib"y "isted in DRG cata"ogues
DRGs in Europe: Moving towards transparency, e iciency and !ua"ity in #ospita"s 1/17 November 2011
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=rigina!DRG system
DRG system
DRG system DRG system
For %hat t"pes of acti/ities4 :cope of DRGs )((
Ps"chiatr" Da" casescute
inpatient care=utpatient care Reha1i!itation
s"stems
separate romorigina" DRGs@
separate romorigina"DRGs@di erent toorigina" DRGs@
separate romorigina" DRGs@
DRGs in Europe: Moving towards transparency, e iciency and !ua"ity in #ospita"s 117 November 2011
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Data co!!ection
Price settingctua!
reim1ursement
L Demograp#ic data
L %"inica" dataL %ost dataL 'am#le si ere$ularity
Essentia! 1ui!ding 1!oc&s of DRG s"stems
2
/
Patientc!assifications"stem
L DiagnosesL roceduresL +everityL re+uency of re!isions
L%ost weig#tsL &ase rate?s@L rices tari sL Average vs
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cti/it"E>penditure
9ontro!7echnica!Efficienc"
?ua!it"dmini6
strati/esimp!icit"
7rans6parenc"
;um1er ofser/ices per
case
;um1erof cases
Hospita! pa"ment s"stemsDRGs for pa"ment' d/antages and disad/antagesof different forms of hospita! pa"ment
16
Fee6for6ser/ice @ @ 6 + + 6 +
G!o1a!1udget 6 6 @ + + @ 6
DRGs in Europe: Moving towards transparency, e iciency and !ua"ity in #ospita"s17 November 2011
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cti/it"E>penditure
9ontro!7echnica!Efficienc"
?ua!it"dmini6
strati/esimp!icit"
7rans6parenc"
;um1er ofser/ices per
case
;um1erof cases
Hospita! pa"ment s"stems
DRGs for pa"ment' d/antages and disad/antagesof different forms of hospita! pa"ment
dumping (avoidance), creaming(selection) and skimping (undertreatment)
up/wrong-coding, gaming
17
Fee6for6ser/ice @ @ 6 + + 6 +
DRG61ased
pa"ment
6 @ + @ + 6 @
G!o1a!1udget 6 6 @ + + @ 6European
countries 1990s/2000s
USA 1980s
DRGs in Europe: Moving towards transparency, e iciency and !ua"ity in #ospita"s17 November 2011
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Main #uestions re!ating to data co!!ection
Clinical dataclassification system for diagnoses and classification system for procedures
Cost dataimported (not good but easy) or collected within countr better but needs
Data co!!ection
L Demograp#ic data
standardised cost accounting)
Sample sizeentire patient population ora smaller sample
Many countries: clinical data = all patients;cost data = hospital samplewith standardised cost accounting system
L %"inica" data
L %ost dataL 'am#le si ere$ularity
1DRGs in Europe: Moving towards transparency, e iciency and !ua"ity in #ospita"s17 November 2011
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;um1er )share of costdata co!!ecting hospita!s
Direct costa!!ocation to patients
Data used for ca!cu!ation ofDRG %eights
ustria20 re erence #ospita"s?O P o a"" #ospita"s@ grosscosting
Eng!and a"" #ospita"s top down microcostingEstonia
A"" #ospita"s contracted byt#e N$ B top down microcosting
Fin!and5 re erence #ospita"s
?O/0P o specia"ised care@ bottom up microcosting
Data co!!ection
L Demograp#ic dataL %"inica" dataL9ost dataL 'am#le si e
re$ularity
9o!!ection of cost data
France88 #ospita"s ?O 1/P oinpatient admissions@
main"y top downmicrocosting
German"125 #ospita"s
?O 6P o a"" #ospita"s@main"y bottom up
microcosting(re!and > > >Po!and > > >Portuga! > > >
7he ;ether!andsunit costs: 15>25 #ospita"s
?O 2 P o a"" #ospita"s@ bottom up microcosting
:pain > > >
:%eden?O 62P o inpatient
admissions@bottom up microcosting
18DRGs in Europe: Moving towards transparency, e iciency and !ua"ity in #ospita"s17 November 2011
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cost %eight 1ase rate or
Price setting
L %ost weig#tsL &ase rate?s@L rices tari sL Average vs
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Country DRG weight(unit)
Applicability of DRG weight
Austria Score Nationwide
England Raw tariff Nationwide
Estonia Relative weight Nationwide
Finland Relative weight Nationwide (8 districts), District-specific (5 districts)
France Raw tariff Nationwide (separate tariffs for public and private hospitals)
Germany Relative weight Nationwide
Price setting
L %ost weig#tsL &ase rate?s@L rices tari sL Average vs
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Ho% European DRG s"stems reduce unintended1eha/iour' -. !ong6 and short6sta" adjustments
Revenues
+#ort>stayout"iers
ong>stayout"iers
n"iersctua!
reim1ursement
*+Deductions?per day@
+urc#arges?per day@
ower *+t#res#o"d
'pper *+t#res#o"d
L o"ume "imitsL=ut!iersL $ig# cost casesL ua"ityL nnovationsL Negotiations
2/DRGs in Europe: Moving towards transparency, e iciency and !ua"ity in #ospita"s17 November 2011
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Ho% European DRG s"stems reduce unintended1eha/iour' *. Fee6for6ser/ice6t"pe additiona! pa"ments
ctua!reim1ursement
Eng!and France German" ;ether6!ands
Pa"ments perhospita! sta"
*ne *ne *ne +evera"possib"e
Pa"ments forspecific high6
'nbund"ed$RGs or e g :
+Tances G$M ore g :
+upp"ementarypayments or e g :
No
L o"ume "imitsL *ut"iersLHigh cost casesL ua"ityL nnovationsL Negotiations
cost ser/ices %#emot#erapy
Radiot#erapyRena" dia"ysisDiagnosticimaging$ig#>cost drugs
%#emot#erapy
Radiot#erapyRena" dia"ysis
Additiona"payments: %'
Emergency care $ig#>cost drugs
%#emot#erapy
Radiot#erapyRena" dia"ysisDiagnostic imaging$ig#>cost drugs
(nno/ation6re!ated addA!pa"ments
Ces Ces Ces Ces ? ordrugs@
2DRGs in Europe: Moving towards transparency, e iciency and !ua"ity in #ospita"s17 November 2011
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Ho% European DRG s"stems reduce unintended1eha/iour' . adjustments for #ua!it"
ctua!reim1ursement
England & Germany: no extra payment ifpatient readmitted within 30 days
rm n i n r n mi in liL o"ume "imitsL *ut"iersL $ig# cost casesL?ua!it"L nnovationsL Negotiations
data England: up 1.5% reduction if quality
standards are not met
France: extra payments for qualityimprovement (e.g. regarding MRSA)
25DRGs in Europe: Moving towards transparency, e iciency and !ua"ity in #ospita"s17 November 2011
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C. Fre#uent re/isions of P9: and pa"ment ratesCountry PCS Payment rate
Frequency of updates Time-lag to data Frequency of updates Time-lag to data
Austria Annual 24 years 45 years 24 years
England Annual Minor revisions annually; irregular
overhauls about every 56 years
Annual 3 years (but adjusted for
inflation)
Estonia Irregular (first update
after 7 years)
12 years Annual 12 years
Finland Annual 1 year Annual 01 year
France Annual 1 year Annual 2 years
Germany Annual 2 years Annual 2 years
Ireland Every 4 years Not applicable (imported
AR-DRGs)
Annual 12 years
Netherlands Irregular Not standardized Annual or when
considered necessary
2 years, or based on
negotiations
Poland Irregular planned
twice per year
1 year Annual update only of
base rate
1 year
Portugal Irregular Not applicable (imported
AP-DRGs)
Irregular 23 years
Spain (Catalonia) Biennial Not applicable (imported
3-year-old CMS-DRGs)
Annual 23 years
Sweden Annual 12 years Annual 2 years
26DRGs in Europe: Moving towards transparency, e iciency and !ua"ity in #ospita"s17 November 2011
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Ho% do DRG s"stems dea! %ith inno/ations4
ctua!reim1ursement
27DRGs in Europe: Moving towards transparency, e iciency and !ua"ity in #ospita"s17 November 2011
L o"ume "imitsL *ut"iersL $ig# cost casesL ua"ityL (nno/ationsL Negotiations
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9onc!usions so far
DRG>based #ospita" payment is t#e main met#od o providerpayment in Europe, but systems vary across countries Di erent patient c"assi ication systems DRG>based budget a""ocation vs case>payment Regiona" "oca" adKustment o cost weig#ts conversion rates
(o address potentia" unintended conse!uences, countries >
operate DRG>based payment toget#er wit# ot#er payment mec#anisms re ine patient c"assi ication systems continous"y ?increase number o groups@ p"ace a comparative"y #ig# weig#t on procedures base payment rates on actua" average ?or best>practice@ costs
reimburse out"iers and and #ig# cost services separate"y update bot# patient c"assi ication and payment rates regu"ar"y
done rig#t ?w#ic# is comp"e @, DRGs can contribute to increasedtransparency and e iciency J and possib"y !ua"ity
2DRGs in Europe: Moving towards transparency, e iciency and !ua"ity in #ospita"s17 November 2011
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EuroDRG consortium members
icture: 22nd [anuary 2010, aris
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