The implementation of inpatient case mix funding in Alberta and Ontario does not allow for adequate incentives to shift resources to an outpatient basis, where appropriate, or to provide outpatient care efficiently. This paper explores the prospects and problems of further extending case mix tools into this area. The availability of tools to characterize output for day surgery, special clinics and emergency care is surveyed. We conclude that case mix funding is desirable and feasible for ambulatory surgery; however, it is questionable for emergency care and special clinics. However, developments in this area in the United States will continue, and this will likely maintain an interest in Canada.
BACKGROUND: We wanted to assess the quality of coding of diagnoses and procedures, the resulting DRG classification and the financial consequences of coding errors for the hospital owner in patients with chronic obstructive pulmonary disease. MATERIAL AND METHODS: We identified 330 hospitalizations in the Central Hospital of Akershus 1 January to 30 November 1999 in DRG 088 (chronic obstructive pulmonary diseases) after an initial DRG classification. The patients' discharge summaries were reviewed for errors in coding of diagnoses and procedures and, where applicable, recoded. DRG classification was then redone and the changes analysed. RESULTS: After review of 302 available discharge summaries (92%) and recoding, the most common primary diagnoses were chronic obstructive pulmonary disease (68%), respiratory failure (17%), and pneumonia (8%). The recoding led to change of the primary diagnosis in 16% of the patient stays, additional secondary diagnosis (18%) or both (18%). The coding was changed for 175 (58%) patients, of which 94 recodings (31%) led to changes in the resulting DRG. On average, the recoding led to an increase per hospitalization of 0.30 DRG points. Two of five coders frequently used respiratory failure as the primary diagnosis (37-43% for hospitalization). INTERPRETATION: The initial routine coding was incomplete. There was large variation in recoding between medically qualified coders; this may have considerable financial consequences for a hospital. There were several problems related to the interpretation of ICD-10 coding, creating opportunities for "upcoding".
In light of ongoing discussions about health care policy, this study offered a method of calculating costs at Manitoba hospitals that compared relative costliness of inpatient care provided in each hospital.
This methodology also allowed comparisons across types of hospitals-teaching, community, major rural, intermediate and small rural, as well as northern isolated facilities.
Data used in this project include basic hospital information, both financial and statistical, for each of the Manitoba hospitals, hospital charge information by case from the State of Maryland, and hospital discharge abstract information for Manitoba. The data from Maryland were used to create relative cost weights (RCWs) for refined diagnostic related groups (RDRGs) and were subsequently adjusted for Manitoba length of stay. These case weights were then applied to cases in Manitoba hospitals, and several other adjustments were made for nontypical cases. This case mix system allows cost comparisons across hospitals.
In general, hospital case mix costing demonstrated variability in hospital costliness, not only across types of hospitals but also within hospitals of the same type and size.
Costs at the teaching hospitals were found to be considerably higher than the average, even after accounting for acuity and case mix.
This paper presents comparative financial ratios that can be adopted by health system administrators and policy analysts to begin to evaluate the performance of acute care hospitals. We combined financial, statistical and clinical information for 73 acute care hospitals in Manitoba for fiscal 1997/98 to calculate 15 indicators of financial performance. Our findings suggest that there is variability between hospital types in their average costs per weighted case, cost structure and financial performance.
The extent of random financial risk involved in the Finnish bed-day and Diagnosis Related Groups (DRG) based hospital pricing systems were estimated and compared using parametric and simulation methods. DRG based payment schemes were found to provide significantly better protection against financial risk for municipalities, but municipality's size was the main determinant of financial risk. Small municipalities should use longer contracts between hospitals or form bigger purchaser-organisations for risk pooling. In addition, the current risk management system proved to be ineffective in decreasing the random variation in total costs.
The financing of health care services in Norway has been changed from a system of global budgeting to a system partly based on Diagnosis-Related Groups (DRG). The government has decided to derive a part of the hospital revenue from DRG-based, per-patient financing. The aim of this study is to determine whether the present remuneration system covers the actual hospital expenses of liver transplant patients, and whether the present method of calculating DRG-costs is adequate for our institution. Our group developed a prospective method of determining the actual cost per patient. We closely observed and collected the data of eight liver transplant patients during their hospital stay. We divided each of the patients' resource requirements into four categories; heavy intensive care, light intensive care, intermediate care, and ordinary care. In addition, we recorded the number of staff involved, the duration of surgery, the major procedures, and the medical- and material costs. The actual cost of each patient was calculated, based on these data. The actual cost was compared with the corresponding hospital remuneration for each patient. Median cost for liver transplantation was NOK 536.785 (range: NOK 295.113-NOK 844.345) (1$=7,5 NOK), while the corresponding hospital refund was NOK 457.785 (range: NOK 436.465-NOK 483.040). The difference is not statistically significant ( P=0.2). The average 100% DRG-based cost of a liver transplantation was NOK 730.321, which is significantly higher than the actual cost ( P=0.02). The hospital's reimbursement for liver transplantation did not differ significantly from the actual registered cost. The computed cost was significantly lower than the DRG-based cost.
Competition policy has played a very limited role for health care provision in Norway. The main reason is that Norway has a National Health Service (NHS) with extensive public provision and a wide set of sector-specific regulations that limit the scope for competition. However, the last two decades, several reforms have deregulated health care provision and opened up for provider competition along some dimensions. For specialised care, the government has introduced patient choice and (partly) activity (DRG) based funding, but also corporatised public hospitals and allowed for more private provision. For primary care, a reform changed the payment scheme to capitation and (a higher share of) fee-for-service, inducing almost all GPs on fixed salary contracts to become self-employed. While these reforms have the potential for generating competition in the Norwegian NHS, the empirical evidence is quite limited and the findings are mixed. We identify a set of possible caveats that may weaken the incentives for provider competition - such as the partial implementation of DRG pricing, the dual purchaser-provider role of regional health authorities, and the extensive consolidation of public hospitals - and argue that there is great scope for competition policy measures that could stimulate provider competition within the Norwegian NHS.
Information about the cost-effectiveness of early intervention programmes for first-episode psychosis is limited.
To evaluate the cost-effectiveness of an intensive early-intervention programme (called OPUS) (trial registration NCT00157313) consisting of enriched assertive community treatment, psychoeducational family treatment and social skills training for individuals with first-episode psychosis compared with standard treatment.
An incremental cost-effectiveness analysis of a randomised controlled trial, adopting a public sector perspective was undertaken.
The mean total costs of OPUS over 5 years (€123,683, s.e. = 8970) were not significantly different from that of standard treatment (€148,751, s.e. = 13073). At 2-year follow-up the mean Global Assessment of Functioning (GAF) score in the OPUS group (55.16, s.d. = 15.15) was significantly higher than in standard treatment group (51.13, s.d. = 15.92). However, the mean GAF did not differ significantly between the groups at 5-year follow-up (55.35 (s.d. = 18.28) and 54.16 (s.d. = 18.41), respectively). Cost-effectiveness planes based on non-parametric bootstrapping showed that OPUS was less costly and more effective in 70% of the replications. For a willingness-to-pay up to €50,000 the probability that OPUS was cost-effective was more than 80%.
The incremental cost-effectiveness analysis showed that there was a high probability of OPUS being cost-effective compared with standard treatment.
This paper estimates cost efficiency scores using the bootstrap bias-corrected procedure, including variables for teaching and research, for the performance of university hospitals in the Nordic countries. Previous research has shown that hospital provision of research and education interferes with patient care routines and inflates the costs of health care services, turning university hospitals into outliers in comparative productivity and efficiency analyses. The organisation of patient care, medical education and clinical research as well as available data at the university hospital level are highly similar in the Nordic countries, creating a data set of comparable decision-making units suitable for a cross-country cost efficiency analysis. The results demonstrate significant differences in university hospital cost efficiency when variables for teaching and research are entered into the analysis, both between and within the Nordic countries. The results of a second-stage analysis show that the most important explanatory variables are geographical location of the hospital and the share of discharges with a high case weight. However, a substantial amount of the variation in cost efficiency at the university hospital level remains unexplained.