Market share of the for-profit and not-for-profit sector from health insurance expenditures

AIM: The aim of the study is to analyze the market share of for-profit private and not-for-profit sector from the expenditures on medical services of the Hungarian National Health Insurance Fund (NHIF), to show its changes in the last years and to show on which field they can be found. DATA AND METHODS: The data derives from the financial database of the National Health Insurance Fund (NHIF) covering the period 1995-2002. The analysis includes the medical provisions (primary care, health visitors, dental care, out- and inpatient care, home care, kidney dialysis, CT-MRI). RESULTS: In 1995 only 6.91% (12.5 billions Ft) of total expenditure for medical services went to for-profit private providers. By 2002 the market share of private providers increased to 15.95% (78.5 billions Ft). During the same period we realized a dynamic increase in the market share of non-profit sector: from 1.04% in 1995 to 2.58% in 2002. The role of private providers is dominant in the case of general practitioners, dental care, transportation, kidney dialysis, CT/MRI and home care (home nursing). CONCLUSIONS: The financial data of the NHIF showed the dynamic increase of market share of for-profit private providers and non-profit sector in many field of health care, although they role in the two most important fields (out- and inpatient care) is still negligible.     

Who pays and who benefits from health care? An assessment of equity in health care financing and benefit distribution in Tanzania

Little is known about health system equity in Tanzania, whether in terms of distribution of the health care financing burden or distribution of health care benefits. This study undertook a combined analysis of both financing and benefit incidence to explore the distribution of health care benefits and financing burden across socio-economic groups. A system-wide analysis of benefits was undertaken, including benefits from all providers irrespective of ownership. The analysis used the household budget survey (HBS) from 2001, the most recent nationally representative survey data publicly available at the time, to analyse the distribution of health care payments through user fees, health insurance contributions [from the National Health Insurance Fund (NHIF) for the formal sector and the Community Health Fund (CHF), for the rural informal sector] and taxation. Due to lack of information on NHIF and CHF contributions in the HBS, a primary survey was administered to estimate CHF enrollment and contributions; assumptions were used to estimate NHIF contributions within the HBS. Data from the same household survey, administered to 2224 households in seven districts/councils, was used to analyse the distribution of health care benefits across socio-economic groups. The health financing system was mildly progressive overall, with income taxes and NHIF contributions being the most progressive financing sources. Out-of-pocket payments and contributions to the CHF were regressive. The health benefit distribution was fairly even but the poorest received a lower share of benefits relative to their share of need for health care. Public primary care facility use was pro-poor, whereas higher level and higher cost facility use was generally pro-rich. We conclude that health financing reforms can improve equity, so long as integration of health insurance schemes is promoted along with cross-subsidization and greater reliance on general taxation to finance health care for the poorest.     

Market restructuring and pricing in the hospital industry

This paper examines the diagnosis related group-level (DRG) price effects of recent hospital mergers and acquisitions that occurred in Ohio and California. Empirical results indicate that hospital mergers and acquisitions increase prices at the DRG level. Further, price increases are greater in DRGs where the merging hospitals gained substantial market share compared to DRGs where the merging hospitals did not gain significant market share. These results suggest that DRG specific market share plays an important role in a hospital's post-merger pricing strategy.     

Expansion of Medicare's definition of post-acute care transfers

In October 1998, the definition of a transfer in Medicare's hospital prospective payment system was expanded to include several post-acute care (PAC) providers in 10 high-volume PAC diagnosis-related groups (DRGs). In this methodological article, the authors respond to a congressional mandate to consider more DRGs in the definition. Empirical results support expansion to many more DRGs that are split in ways that understate total PAC volumes, including 25 DRG pairs (with/without complications) and DRG bundles (e.g., infections) that together exhibit high PAC volumes. By contrast, some DRGs (e.g., craniotomy) are questionable PAC candidates because of their heterogenous procedure mix.     

Rural Implications of Medicare''s Post-Acute-Care Transfer Payment Policy

CONTEXT: Under the Medicare post-acute-care (PAC) transfer policy, acute-care hospitals are reimbursed under a per-diem formula whenever beneficiaries are discharged from selected diagnosis-related groups (DRGs) to a skilled nursing facility, home health care, or a prospective payment system (PPS)-excluded facility. Total per-diem payments are below the full DRG payment only when the patient's length of stay (LOS) is short relative to the geometric mean LOS for the DRG; otherwise, the full DRG payment is received. This policy originally applied to 10 DRGs beginning in fiscal year 1999 and was expanded to additional DRGs in FY2004. The Secretary may include other DRGs and types of PAC settings in future expansions. PURPOSE: This article examines how the initial policy change affected rural and urban hospitals and investigates the likely impact of the FY2004 expansion and other possible future expansions. METHODS: The authors used 1998-2001 Medicare Provider Analysis and Review (MEDPAR) data to investigate changes in hospital discharge patterns after the original policy was implemented, compute the change in Medicare revenue resulting from the payment change, and simulate the expected revenue reductions under expansions to additional DRGs and swing-bed discharges. FINDINGS: Neither rural nor urban hospitals appear to have made a sustained change in their discharge behavior so as to limit their exposure to the transfer policy. Financial impacts from the initial policy were similar in relative terms for both types of hospitals and would be expected to be fairly similar for an expansion to additional DRGs. On average, including swing-bed discharges in the transfer policy would have a very small financial impact on small rural hospitals; only hospitals that make extensive use of swing beds after a short inpatient stay might expect large declines in total Medicare revenue. CONCLUSION: Rural hospitals are not disproportionately harmed by the PAC transfer policy. An expanded policy may even benefit rural hospitals by recognizing their lower use of post-acute-care and readjusting DRG weights so that they are paid more appropriately when providing the full course of inpatient care.     

Hospital expenditure for the elderly in Italy

The consequences of demographic and epidemiological transition have deeply involved the health care systems of western countries. Both the highest burden of care and the higher costs of in-patient services are due to the elderly patients. The aim of this paper is to evaluate the percentage of in-patient care due to the elderly patients and the role played by this care on affecting costs. To this purpose all the Italian 1996 discharge reports referred to in-patient care longer than one day, have been analysed. About 40% of in-patient care expenditure is due to over-65 patients while the percentage of the elderly of total Italian population is roughly 17%. The highest age-specific hospitalisation rate are due to cardiovascular and neurological diseases. Only 4 out of 30 most frequent DRGs among elderly patients are surgical pathologies, while the others are medical ones. The implementation of day-hospital care or out-of-hospital care addressed to the elderly will have to take in account these pathologies in order to be effective in both meeting treatment needs and reducing hospital expenditure.     

Economic incentives and diagnostic coding in a public health care system

We analysed the association between economic incentives and diagnostic coding practice in the Norwegian public health care system. Data included 3,180,578 hospital discharges in Norway covering the period 1999–2008. For reimbursement purposes, all discharges are grouped in diagnosis-related groups (DRGs). We examined pairs of DRGs where the addition of one or more specific diagnoses places the patient in a complicated rather than an uncomplicated group, yielding higher reimbursement. The economic incentive was measured as the potential gain in income by coding a patient as complicated, and we analysed the association between this gain and the share of complicated discharges within the DRG pairs. Using multilevel linear regression modelling, we estimated both differences between hospitals for each DRG pair and changes within hospitals for each DRG pair over time. Over the whole period, a one-DRG-point difference in price was associated with an increased share of complicated discharges of 14.2 (95 % confidence interval [CI] 11.2–17.2) percentage points. However, a one-DRG-point change in prices between years was only associated with a 0.4 (95 % CI \(-1.1\) to 1.8) percentage point change of discharges into the most complicated diagnostic category. Although there was a strong increase in complicated discharges over time, this was not as closely related to price changes as expected.     

The impact of different coding systems on DRG assignment and data

The Diagnosis Related Group (DRG) classification system is widely used to describe the casemix of acute care hospitals, making it possible to compare the casemix of hospitals from different countries. However, in order to fully understand these comparisons, it is necessary to clarify the impact which the different coding systems used in various countries may have had on the results. The DRG system is based on codes from the International Classification of Diseases 9th Revision Clinical Modification (ICD9CM). Countries which use other coding systems convert, i.e. map, their codes into the nearest ICD9CM equivalent before allocating the DRGs. The impact of mapping on both medical and surgical DRGs is discussed and new titles are given for the affected DRGs. As far as possible, problems caused by mapping are distinguished from those caused by differences in coding practices. Based on the analysis of the classification systems, the mapping tables and the resulting DRG data, it is concluded that using mapped data does not have a great impact on the DRGs. Only 37 DRGs (7.8%), 15 medical and 22 surgical classes, are affected by mapping problems. However, while the scale of these problems is not large, given the large number of different surgical classification systems currently in use in Europe, the introduction of a standard surgical classification system for Europe is recommended.     

Prospects for using DRGs in Swedish hospitals.

Overall cost-containment seems satisfactory in Swedish health care. Health care's share of the Gross Domestic Product (GDP) has thus decreased from 9.7% to 9.1% between the years 1982 and 1986. A recent study indicates, however, a decreasing productivity, measured by traditional output measures. It may be argued that these measures are not adequate as they do not reflect the changing patterns of medical technology, case-mix and quality. The Swedish Planning and Rationalization Institute of the Health and Social Services (Spri) has started a project which aims at evaluating whether the Diagnosis Related Group (DRGs) could be used for planning, budgeting and follow-up in the Swedish health care system. The interest in these matters is at present great in Sweden. The feasibility and adequacy of DRGs in the Swedish context are being tested using more than 500,000 discharges from 6 counties. All the necessary variables for DRG assignment are already routinely collected in the Swedish discharge abstracts. In a comparison with an American database concerning individual DRGs, Swedish and American lengths of stay correlate rather well (r = 0.83). There is a difference in the number of diagnoses on each discharge record in the two databases. On average 1.4 diagnosis codes are used for each patient in the Swedish hospital sample compared to 2.8 codes in the United States database. This may indicate a systematic difference in coding practice of complications and co-morbidities.     

Introduction of diagnosis-related groups in Germany: evaluation of impact on in-patient care in a dermatological setting

BACKGROUND: German diagnosis-related groups (G-DRG) have been introduced in Germany as a reimbursement system for in-patient care. The aim of this study was to report data-based experiences from the introduction process and to evaluate the impact on in-patient dermatology. METHODS: A quantitative analysis including clinical data from two large university centres of dermatology over a time period of 4 years (2003-06) has been performed. Characteristics and trends of case-mix index, number of cases, average age, length of stay (LOS), surgical and medical treatments and in-patient case groups were studied in detail. RESULTS: It was found that the case-mix index values increased after the introduction period, but subsequently declined on the initial value. At the same time, an increase of dermatological hospital admissions can be noticed parallel to a significant reduction of LOS (P < 0.001) and a moderate increase of average age (P < 0.001). Analysis of DRG assignment revealed an initial significant decline of surgical in-patient procedures and increasing medical treatments, however, without obvious long-term changes. Furthermore, a growing importance for dermatological oncology and inflammable skin diseases within the in-patient setting could be observed. CONCLUSIONS: The introduction of the G-DRG system in Germany induced changes in in-patient care affecting hospital admission rates, LOS and cases treated in an in-patient setting. In-patient activities have not been reduced with the DRG introduction; however, long-term interdisciplinary research approaches are needed to explore the future impact on health care providing and quality of health care in depth.     

Geographic variation in the use of post-acute care

OBJECTIVE: To assess the extent and consistency of geographic differences in the use of post-acute care (PAC), and the stability of this pattern of variation. DATA SOURCES: The 5 percent Medicare data sample for 1996, 1997, and the first eight months of 1998 were used. STUDY DESIGN: Patterns of PAC use for various Diagnosis-related Groups (DRGs) cross states (33 with enough cases per year) and census divisions were examined. The consistency of relative rankings for overall PAC use and use within defined DRGs was compared. PRINCIPAL FINDINGS: PAC use varied substantially across regions. For example, the extent of any PAC use for stroke patients varied by 12 percentage points among census regions in 1998. The pattern of PAC use was quite consistent across years; 30 of the 36 possible Spearman rank order correlations were statistically significant with coefficients ranging from 0.35 to 0.95 among the DRGs studied. The correlations among DRGs were generally high. For skilled nursing facility use, all the correlations were above 0.5 and were statistically significant; in general the patterns were highest within medical DRGs (0.65-0.93). CONCLUSIONS: The variation in PAC use is not a statistical artifact. It is likely the result of several forces: practice styles, supply of services, and local regulatory practices.     

DRGs in psychiatric hospital financing exemplified by Hungary. A model for Germany?

One of the most important provisions incorporated in the reform of the German health sector has been the introduction of a per case prospective payment system for hospitals with the exception of admissions to psychiatric care. The reasons for the exclusion of psychiatric care are unclear, but it is as a result all the more interesting to look at the experience of Hungary, where in-patient psychiatric care has been financed on the basis of diagnosis-related groups (DRGs) for the past seven years. The article describes how in the early 1990's the funding of the Hungarian health service was reorganized from being a state-financed system with a set budget to a system financed by contributions. Parallel to this development, service-related financing was introduced. In the hospital sector this involved DRGs. At the beginning of 1993 the Hungarian DRGs comprised only 437 categories, but this has since increased to 758. Furthermore, other characteristics are listed which, apart from the number of groups, differentiate the Hungarian DRGs from the AP-DRGs. Among other things, service-related financing includes non-typical areas such as psychiatry. In this case, it covers in-patient psychiatric care in an unusual combination of DRGs in the acute case category (50% of all beds in psychiatric units in Hungary are for acute cases) with daily nursing charges in the chronic case category. An analysis is given in the article of 16 homogeneous diagnostic categories in psychiatric care, followed by experiences gathered in conjunction with the application of this approach in this particular sphere, with special reference to three problem areas. These are as follows: the trend towards diagnoses with a relatively high weighting; the practice of charging for psychiatric DRGs in somatic wards; and, finally, the perpetuation of poor service structures and practices through DRGs. In general, evidently the introduction of psychiatric DRGs may also be recommended in Germany because of the danger that otherwise psychiatry might be marginalized and isolated in a corner for chronic medical cases. As the only discipline or specialist sphere with a non-service based budget there is a real threat that funding would be kept low. Thus, under the superior financial conditions in Germany, the disadvantages registered in Hungary would not occur or would become manifest only in a milder form. However, it is important that prior to implementation costing is done with extreme care to determine the relative weighting and duration of treatment for each of the categories and that following introduction of DRGs there is a regular control of coding practices, structure of diagnoses and case-mix changes.     

DRG calculation and utilization patterns: a review of method and policy

This paper examines methodological and policy issues of interest to medical geographers who use diagnosis-related groups (DRGs) in their research. Methodological issues are studied in terms of the calculation of DRGs and variation in the utilization of surgical and medical DRGs. It is argued that a shift to a single DRG price system should first address the (i) regional disparities that currently exist and the need for large-scale indices of medical wages and labor costs; (ii) severity of illness measurements other than the present nominal ones; and (iii) wide variation among medical versus surgical procedures. The Department of Commerce's Economic Analysis Area is recommended to remedy the problem of geographic scale. Policy issues of interest to medical geographers center around the shift to greater hospital specialization which is likely to continue across the country. Inner-city, rural and teaching hospitals may continue to be inadequately reimbursed by DRGs, treat more medically indigent, or both. Medical geographers should be aware of the policy and methodological issues involved not only in DRGs, but in proposed prospective payment systems for ambulatory and long-term care.     

Informal payments for healthcare services and short-term effects of the introduction of visit fee on these payments in Hungary

The objective of this paper is to study the short-term effects of the introduction of the visit fee in Hungary in 2007 on informal patient payments. We present the pattern of informal payments in primary, out-patient specialist and in in-patient care in the period before and shortly after the visit fee was introduced. We also analyse whether in the short run, the introduction of visit fee decreased the probability of paying informally. For the analysis, we use a dataset for a representative sample of 2500 respondents collected in 2007 shortly after the introduction of the visit fee, which contains data on informal payments for healthcare services. According to our results, 9% of the patients paid informally during their last visit to GP (2 Euros on average), 14% paid informally for specialist care (35 Euros on average) and 50% paid informally for hospitalisation (58 Euros on average). We find a significant reduction in the probability of paying informally only for elderly patients in case of in-patient care. Our results suggest that informal payments are widely spread in Hungary, especially in in-patient care. The short run potential of the introduction of the visit fee to reduce informal payments seems to be minor.     

Predicting the cost of hospital stay for stroke patients: the use of diagnosis related groups

In order to provide tailor-made care, governments are considering the implementation of output-pricing based on hospital case-mix measures, such as diagnosis related groups (DRG). The question is whether the current DRG classification system can provide a satisfactory prediction of the variance of costs in stroke patients and if not, in what way other variables may enhance this prediction. In this study, data from 731 stroke patients hospitalized at University Hospital Maastricht during 1996-1998 are used in the cost analysis. The DRG classification for this group uses information--in addition to the DRG classification operation or no operation--on the patient's age combined with discharge status. The results of regression analysis show that using DRGs, the variance explained in the costs amounts to 34%. Adding other variables to the DRGs, the variance explained increases to about 61%. Additional factors highly correlating with inpatient costs are the level of functioning after stroke, comorbidity, complications, and 'days of stay for non-medical reasons'. Costs decreased for stroke patients discharged during the latter part of the years studied, and if stroke patients happened to die during their hospital stay. The results do suggest that future implementation of output-pricing based on the DRG case-mix measures is feasible for stroke patients only if it is enhanced with information on complications and the level of functioning.     

Diagnosis related group coding accuracy of the peer review organizations

Congress created the peer review organizations (PROs), in part, to check the accuracy of diagnosis related groups (DRGs) billed to Medicare. This study determined the accuracy of the peer review organizations' abstraction of DRGs during federal fiscal year 1985. A two-stage cluster design sampled 7050 medical records from 239 hospitals stratified by size. Credentialed medical record professionals used blinded techniques with reliability checks to abstract the ICD-9-CM codes and select the correct DRGs. Physicians reviewed medical records whose abstracted DRG differed from the DRG paid by the fiscal intermediary. The peer review organizations reported abstracting 1715 of these discharges. The peer review organization selected the correct DRG in 75.6 percent of the 1715 abstractions, a significantly lower proportion than the 80.3 percent paid accurately by the fiscal intermediaries. Upcoding compounded the peer review organizations' errors.     

Explaining cost variations in DRGs 'Acute Myocardial Infarction' by severity of illness

The empirical relationship is analyzed between the severity of illness and costs of medical care for 464 patients classified into DRGs 121-123, Acute Myocardial Infarction (AMI), in the University Hospital, Maastricht. Severity of cardiac and cardiovascular disorders characteristic of acute myocardial infarction is defined and operationalized in a sense that closely resembles the clinical practice of cardiologists. The effect of the severity of illness on DRG cost variations is studied separately for the costs of acute care (such as thrombolytic therapy, cardiac catheterization and percutaneous transluminal coronary angioplasty (PTCA)), length of hospital stay, costs of intensive nursing care at the coronary care unit (CCU) and the costs of ECGs, laboratory tests, echocardiography, exercise tests and drugs. For AMI patients, severity of illness measured by specific clinical criteria is found to give better predictions (higher R2) for costs of medical care than the DRG classification.     

Quality of medical database to valorize the DRG model by ISA cost indicators

BACKGROUND: The use of the French version of the DRG model is focused on cost allocation, based on the case-mix system and the use a weight called ISA (Synthetic Index of Activity) for each DRG. However, this administrative database is becoming more and more used by both researchers and health policy makers for health planning and benchmarking. In France, data abstraction and coding of medical records is done by physicians. The objective of this study was to determine the accuracy of a database of the discharge summaries used for DRGs and to compare consequences of inappropriate coding on budget estimation and risk adjustment. METHODS: Samples of discharge summaries from six cardiology units were recoded by trained physicians in data abstracting and coding. Comparison between initial and recoded diagnoses (errors on main diagnosis or on comorbidities) used by the DRG system algorithm, and the original and final case-mix were performed. The before and after abstracted data were stratified and compared by principal diagnosis (myocardial infarction or congestive heart failure) and discharge status (dead or alive). MAIN RESULTS: Comorbidities were underreported by physicians of cardiology units compared to reabstracted data (mean number of secondary diagnoses per summary: 2.1 vs. 3.6, p<0.001), especially those which had a minimal impact on the DRG classification. In spite of a 15% rate of wrong DRGs, there was no significant difference in the total amount of ISA after data reviewing. Underreporting of comorbidities is more important for medical records of dead patients at discharge but, without significant effect on rate of change in DRG and amount of ISA. CONCLUSION: Discharge summaries used in the French DRGs system consistently underestimate the presence of comorbid conditions, which has direct implications for policy-makers comparing performance between hospital units. Both clinical practitioners and policy makers should be aware of this bias when assessing patient's quality of care or performing health planning through discharge summaries.     

按病种定额预付制的可行性探讨

探讨按病种的定额预先付费(DRGs-PPS)对按服务的事后付费(fee-for-service)改革的可行性。DRGs-PPS起源于美国，并在欧洲等相继推广，对提高医院效率、评价医疗服务质量、控制住院费用等方面有显著作用，可产生重大社会效益与经济效益。但实行DRGs-PPS存在管理难度大、服务打折、费用转嫁等问题。以各医院的平均病种费用试行预先支付制度，总量控制，是一种较好的可行方法。     

Trauma case mix and hospital payment: the potential for refining DRGs.

Uniform hospital discharge abstract data from Maryland were used to examine the homogeneity of trauma-related DRGs with respect to a well-established measure of injury severity, the Injury Severity Score (ISS). Thirty DRGs were identified as including trauma cases with a wide range of severity; for each of these DRGs, ISS explains a significant amount of variation in length of stay. By applying statistical techniques similar to those used to create the original DRG groupings, these 30 DRGs were subdivided by severity and age categories to create a new set of severity-modified DRGs. The potential effects of using DRGs and modified DRGs to pay for inpatient care within the Maryland state regionalized system of trauma care were examined. Payments based on regional averages per DRG and per modified DRG were compared to actual hospital charges regulated by the state's Health Services Cost Review Commission. Using average charges per DRG as a basis of payment, approximately !1.4 million (11 percent of total hospital charges) would be shifted from trauma centers to nontrauma centers. This shift represents an 18 percent loss in revenues to trauma centers and a 30 percent gain in revenues to nontrauma centers. Using a payment system based on severity-modified DRGs, trauma centers would still experience a net loss in revenues and the nontrauma centers a net gain, but the total amount of the shift would be reduced from $11.4 million to $9.8 million. The results argue for the need to explore alternative payment systems not strictly based on current DRGs. Because of DRGs do not adequately reflect severity differences, using them to pay hospitals will create financial incentives that discourage regionalization of trauma care.