Diagnosis Related Groups in Europe: Moving towards transparency, efficiency and quality in hospitals 17 November 2011 DRGs in Europe: Moving towards transparency, efficiency and quality in hospitals 1 Reinhard Busse, Prof. Dr. med. MPH FFPH Department of Health Care Management, Berlin University of Technology & European Observatory on Health Systems and Policies on behalf of the EuroDRG team Understanding DRGs in Europe – the EuroDRG project
Transcript
Diagnosis Related Groups in Europe: Moving towards transparency, efficiency
and quality in hospitals
17 November 2011 DRGs in Europe: Moving towards transparency, efficiency and quality in hospitals 1
Reinhard Busse, Prof. Dr. med. MPH FFPHDepartment of Health Care Management, Berlin University of Technology
& European Observatory on Health Systems and Policies
on behalf of the EuroDRG team
Understanding DRGs in Europe – the EuroDRG project
A policy question in the 6th EU Framework Programme:
Why do costs of health services differ among EU countries atthe micro level?
How I got interested in DRGs (2002)
£5,000
£6,000
£7,000
£8,000
£9,000
NHS
2
£0
£1,000
£2,000
£3,000
£4,000
£5,000
Cataract Hip Knee
UK private
France
The first nine patients sent to
France by the English NHS
(not shown: the 40 journalists
who accompanied them)
Are these data realistic?
Are they representative?
How can the differences be explained?DRGs in Europe: Moving towards transparency, efficiency and quality in hospitals17 November 2011
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 €
Using 10 standardised “vignettes” across
countriesE.g. Acute myocardial infarction
395,97
1025,76
1861,02
2465,32
2866,36
5013,64
308,88592,15
2236,40
2868,16
483,05
1415,79
2541,8452733,38
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)
33DRGs in Europe: Moving towards transparency, efficiency and quality in hospitals17 November 2011
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
patient variables
medical and management
decision variables
gender, age,main diagnosis, other
diagnoses, severity
mix and intensity of procedures,
Open question 1: How much do these variables contribute to cost
395,97
1025,76
1861,02
2465,32
2866,36
5013,64
308,88592,15
2236,40
2868,16
483,05
1415,79
2541,8452733,38
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)
44
mix and intensity of procedures, technologies and human
resource use
e.g. size, teaching status; urbanity; wage level
structural variables on
hospital/ regional/
national level
these variables contribute to costvariation (and do DRG systems
take them into account)?
DRGs in Europe: Moving towards transparency, efficiency and quality in hospitals17 November 2011
• budget allocation (or division among purchasers),
• planning of capacities,
• payment (� efficiency)
Exact reasons, expectations and DRG usage differ
among countries – due to (de)centralisation, one
vs. multiple payers, public vs. mixed ownership.
9DRGs in Europe: Moving towards transparency, efficiency and quality in hospitals17 November 2011
SuomiFinland
Countries covered by EuroDRG project17 November 2011 10
DRGs in Europe: Moving towards transparency, efficiency and quality in hospitals
What did we do?
• Phase I (= session I today)
How do DRG system in Europe work? Why and when implemented? How does patient classification work? Where do data come from? Uniform or regionally adapted? How often updated? Impact on efficiency and quality? …
• Phase II (= session II today)
How do DRG systems perform? To empirically analyse that, How do DRG systems perform? To empirically analyse that, we chose 10 “episodes of care” for across-country comparisons of actual classification, reimbursement, factors explaining cost variation, cost-quality relationship …
• Phase III (= this afternoon)
Conclusions for policy-makers within and beyond European countries …
17 November 2011 11DRGs in Europe: Moving towards transparency, efficiency and quality in hospitals
Finland - THL England - CHE Austria - MSIG Netherlands - iBMG Poland - NHF Spain - IMAS Germany - TUB Sweden - CPK
EoC and related questionsRecommended for inclusion?
(yes/no)
Recommended for inclusion?
(yes/no)
Recommended for inclusion?
(yes/no)
Recommended for inclusion?
(yes/no)
Can you differentiate the
following items?
(yes/no)
RemarksRecommended for inclusion?
(yes/no)
Recommended for inclusion?
(yes/no)
Recommended for inclusion?
(yes/no)
Recommended for inclusion?
(yes/no)
1. Breast cancer
Types of carcinoma (invasive and not invasive) no NO - CANNOT IDENTIFY DISEASE STAGE, SO COMPARABILITY PROBLEMATIC
yes, however we should explicitly in- or exclude certain treatments.
We could have a clear picture of breast cancer.
Yes
ICD10
YES yes, but cannot identify disease stage
yes
Stages of the disease (TNM, IUCC …), grade of the disease (G1-G4)
No
Protein and gene expression status (oestrogen receptor (ER), progesterone receptor (PR) and HER2/neu proteins)
No
Types of treatment: surgery, radiation, hormone immune and chemotherapy
Yes
excluding hormone immuneTypes of surgery: tumourectomy, mastectomy - with or without lymph-adenectomy and reconstruction
Yes
ICD92. Colorectal cancer
Location of the cancer, i.e. in the colon (possibly further specified), rectum and caecum
no NO - CANNOT IDENTIFY DISEASE STAGE, SO COMPARABILITY PROBLEMATIC
yes, but a detailed definition is required We could have a clear picture of colorectal cancer. However, we can not identify patients who had both surgery and chemotherapy. Yes
ICD10
YES yes, but cannot identify disease stage
yes
Stages of the cancer (TNM, IUCC, Dukes classification …), grade of the disease (G1-G4)
No
Types of treatment: surgery, radiation, chemotherapy
Yes
ICD9 Extent of surgery (both within colon/ rectum and other organs)
Yes
ICD93. Diabetes mellitus
Types of diabetes (type 1 and type 2) yes,although is complicated
NO yes It is rather difficult to get a clear picture of diabetes mellitus, predominantly owing to the many departments involved and the inability to link them.
Yes
YES yes
yes
Reason for admission (e.g. hyperglycaemic or hypoglycaemic shock; other complications),
Yes
Procedures related to the main diagnosis diabetes (e.g. amputation)
Yes
4. Acute myocardial infarction (AMI)
Type of acute myocardial infarction (both ST-elevated MI [STEMI] and non-ST-elevated MI [NSTEMI])
yes YES yes We could have a clear picture of acute myocardial infarction, except when it comes to CABG procedures.
Yes
YES yes
yes
Treatment (PTCA, stent, CABG/bypass)
Yes
ICD95. Percutaneous coronary interventions (PCI)
Indications for PCI yes,requires exact definition of procedure codes in order to secure comparability between countries
YES yes We could have a clear picture of PCI procedures. However, the number of diagnosis-codes may turn out to be too extensive/ complex to work with.
Yes NO or maybe we think about redefining parameters of the episode
yes
yes
Treatment (PTCA, stent) YesICD9
Location of intervention (number of vessels treated, affected coronary artery, bifurcation …)
Yes
ICD9Details of stent (bare metal vs. drug-eluting; number of stents, affected coronary artery, type of drug on DES …)
Yes
ICD96. Coronary artery bypass graft surgery (CABG)
Indications for CABG yes,requires exact definition of procedure codes in order to secure comparability between countries
YES yes We could have a clear picture of CABG procedures. However, we can not distinguish the underlying diagnoses (such as acute myocardial infarction).
Yes NO or maybe we think about redefining parameters of the episode
yes, but some difficulties
Grafting of both types of blood vessels: arteries and veins
No
Type of surgery: with the usage of cardiopulmonary bypass or so-called ‘off-pump’ surgery
Selected episodes of care:
• Appendectomy
• Cholecystectomy
• AMI
• Bypass (CABG)
• Stroke
• Inguinal hernia
• Hip replacement
• Knee replacement
12
yes
called ‘off-pump’ surgery
Yes
7. Stroke
Cause (due to ischemia (thrombosis or embolism) or haemorrhage)
yes YES yes We could have a clear picture of stroke.
Yes
ICD10
YES yes
yes
Treatment settings (ICU, stroke unit or medical/ neurological ward) Yes
Rehabilitation within operating hospital or associated settings (vs. rehabilitation after transfer, i.e. after end of episode)
No
8. Community-acquired pneumonia
Hospital-acquired pneumonia (nosocomial) (e.g. by special code or ”present on admission“ code)
no NO yes It is rather difficult to get a clear picture of community-acquired pneumonia, because we can not distinguish between hospital and community-acquired pneumonia.
No
yes, but no information on type of antibiotics used for treatment
Treatment settings (ICU or medical ward)
No
Type of treatment (especially antibiotics)
No
9. Inguinal hernia repair
Type of inguinal hernia (bilateral – unilateral, direct – indirect) yes YES yes, should we define a minimal age? It is rather difficult to get a clear picture of inguinal hernia repair, because we can not distinguish between hernia femoralis and inguinalis. Yes
YES yes but not possible to identify direct/indirect
yes
Type of surgical repair (with or without graft or prosthesis implant)
Yes
Treatment setting (inpatient, outpatient)
Yes
inpatient only10. Appendectomy
Type of surgery (laparoscopic or open) yes YES yes We could have a clear picture of appendectomy.
Yes
YES yes
yes
Treatment setting (inpatient, outpatient)
Yes
inpatient only11. Cholecystectomy
Type of surgery (laparoscopic or open) yes YES yes It is rather difficult to get a clear picture of cholecystectomy. However, we could have a clear picture of cholecystitis.
Yes
YES yes
yes
Treatment setting (inpatient, outpatient)
Yes
inpatient only12. Hip replacement
Indication (osteoarthritis, other types of arthritis, protrusio acetabuli, avascular necrosis, hip fractures and benign and malignant bone tumours)
yes YES yes We could have a clear picture of hip replacement. However, we can not always distinguish the underlying diagnoses.
Yes
ICD10
YES yes, but difficult to know numbers for rehabilitation
yes
Type of replacement (e.g. hemiprosthesis, total endoprosthesis, resurfacing)
Yes
Type of surgery (cemented, cementless and hybrid prosthesis)
Yes
First replacement vs. revision Yes
Rehabilitation within operating hospital or associated settings (vs. rehabilitation after transfer, i.e. after end of episode)
No
• Knee replacement
• Breast cancer
• Childbirth
Dropped:
• Colorectal cancer
• Diabetes
• Com.-acq. Pneumonia
• Urolithiasis
• Traumatic brain injury
DRGs in Europe: Moving towards transparency, efficiency and quality in hospitals17 November 2011
Excluded costs(e.g. for infrastructure; in U.S. also physician services)
Payments for non-patient care activities(e.g. teaching, research, emergency availability)
Payments for patients not classified into DRG system(e.g. outpatients, day cases, psychiatry, rehabilitation)
For what types of activities? Scope of DRGs (I)
DRG-based case payments,
DRG-based budget allocation(possibly adjusted for outliers, quality etc.)
(e.g. outpatients, day cases, psychiatry, rehabilitation)
Other types of payments for DRG-classified patients(e.g. global budgets, fee-for-service)
Additional payments for specific activities for DRG-classified patients (e.g. expensive drugs, innovations),
possibly listed in DRG catalogues
DRGs in Europe: Moving towards transparency, efficiency and quality in hospitals 1317 November 2011
Original
DRG
DRG system(included in or
DRG system(included in or
DRG system(identical or
DRG system(included in or
For what types of activities? Scope of DRGs (II)
Psychiatry Day casesAcute
inpatient careOutpatient care Rehabilitation
DRG
systems
(included in orseparate fromoriginal DRGs)
(included in orseparate fromoriginalDRGs)
(identical ordifferent to
original DRGs)
(included in orseparate fromoriginal DRGs)
DRGs in Europe: Moving towards transparency, efficiency and quality in hospitals 1417 November 2011
Data collection
Price setting
Actual
reimbursement
• Demographic data• Clinical data
• Cost data• Sample size, regularity
Essential building blocks of DRG systems
2
34
Patient
classification
system
• Diagnoses• Procedures
• Severity• Frequency of revisions
• Cost weights
• Base rate(s)• Prices/ tariffs
• Average vs. “best”
• Volume limits
• Outliers• High cost cases
• Quality• Innovations
• Negotiations
Import 1
15DRGs in Europe: Moving towards transparency, efficiency and quality in hospitals17 November 2011
Activity
Expenditure
Control
Technical
EfficiencyQuality
Admini-
strative
simplicity
Trans-
parency
Number of
services per
case
Number
of cases
Fee-for-
Hospital payment systemsDRGs for payment: Advantages and disadvantages
of different forms of hospital payment
16
Fee-for-
service+ + - 0 0 - 0
Global
budget - - + 0 0 + -
DRGs in Europe: Moving towards transparency, efficiency and quality in hospitals17 November 2011
Activity
Expenditure
Control
Technical
EfficiencyQuality
Admini-
strative
simplicity
Trans-
parency
Number of
services per
case
Number
of cases
Fee-for-
Hospital payment systems
USA 1980s
DRGs for payment: Advantages and disadvantages
of different forms of hospital payment
� “dumping“ (avoidance), “creaming“
(selection) and “skimping“ (undertreatment)
� up/wrong-coding, gaming
17
Fee-for-
service+ + - 0 0 - 0
DRG-
based
payment
- + 0 + 0 - +
Global
budget - - + 0 0 + -European
countries 1990s/2000s
USA 1980s
DRGs in Europe: Moving towards transparency, efficiency and quality in hospitals17 November 2011
Main questions relating to data collection
Clinical data� classification system for diagnoses and� classification system for procedures
Cost data� imported (not good but easy) or� collected within country (better but needs
Data collection
• Demographic data � collected within country (better but needs standardised cost accounting)
Sample size� entire patient population or � a smaller sample
Many countries: clinical data = all patients;
cost data = hospital sample with standardised cost accounting system
• Clinical data
• Cost data• Sample size, regularity
18DRGs in Europe: Moving towards transparency, efficiency and quality in hospitals17 November 2011
Number (share) of cost
data collecting hospitals
Direct cost
allocation to patients
Data used for calculation of
DRG weights
Austria20 reference hospitals (~8% of all hospitals)
grosscosting x
England all hospitals top down microcosting x
EstoniaAll hospitals contracted by
the NHIFtop down microcosting x
Finland5 reference hospitals
(~30% of specialised care)bottom up microcosting x
Data collection
• Demographic data
• Clinical data
• Cost data
• Sample size, regularity
Collection of cost data
(~30% of specialised care)
France99 hospitals (~ 13% of inpatient admissions)
mainly top down microcosting
x
Germany125 hospitals
(~ 6% of all hospitals) mainly bottom up
microcostingx
Ireland - - -Poland - - -
Portugal - - -
The Netherlandsunit costs: 15-25 hospitals
(~ 24% of all hospitals)bottom up microcosting x
Spain - - -
Sweden(~ 62% of inpatient
admissions)bottom up microcosting x
19DRGs in Europe: Moving towards transparency, efficiency and quality in hospitals17 November 2011
Number (share) of cost
data collecting hospitals
Direct cost
allocation to patients
Data used for calculation of
DRG weights
Austria20 reference hospitals (~8% of all hospitals)
grosscosting x
England all hospitals top down microcosting x
EstoniaAll hospitals contracted by
the NHIFtop down microcosting x
Finland5 reference hospitals
(~30% of specialised care)bottom up microcosting x
Collection of cost dataData collection
• Demographic data
• Clinical data
• Cost data
• Sample size, regularity
(~30% of specialised care)
France99 hospitals (~ 13% of inpatient admissions)
mainly top down microcosting
x
Germany125 hospitals
(~ 6% of all hospitals) mainly bottom up
microcostingx
Ireland
Imported DRG systems and weights (or with only minor modifications)Poland
Portugal
The Netherlandsunit costs: 15-25 hospitals
(~ 24% of all hospitals)bottom up microcosting x
Spain Imported DRG systems and weights
Sweden(~ 62% of inpatient
admissions)bottom up microcosting x
20DRGs in Europe: Moving towards transparency, efficiency and quality in hospitals17 November 2011
“cost weight“
(varies by DRG)
“base rate“ or
adjustment
Price setting
• Cost weights
• Base rate(s)
• Prices/ tariffs
• Average vs. “best”
How to calculate costs and set prices fairly (I)
• Based on good quality data (not possible if
cost weights imported)
• Average costs vs. “best practice”
• “Cost weights x base rate” vs. “Tariff + adjustment”
(varies by DRG) adjustment
Score (e.g. England) £ 30001.0 – 1.32
(varies by hospital)
Raw tariff
(e.g. France)€ 3000
1.0 (+/-)(varies by region and
hospital)
Relative weight
(e.g. Germany)1.0
€ 3000 (+/-)(varies slightly by state)
X
X
X
21DRGs in Europe: Moving towards transparency, efficiency and quality in hospitals17 November 2011
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
• Cost weights
• Base rate(s)
• Prices/ tariffs
• Average vs. “best”
How to calculate costs and set prices fairly (II)
22
Ireland (Adapted) Relative weight Nationwide
(separate weights for paediatric hospitals)
Netherlands Raw tariff Nationwide (67% of DRGs),
hospital-specific (33% of DRGs)
Poland Score Nationwide (separate tariffs for emergencies, elective cases,
day cases)
Portugal (Adapted) Relative weight Nationwide
Spain
(Catalonia)
(1) (Adapted) Raw tariff
(AP-DRGs);
(2) (Imported) Relative weight
(CMS-DRGs)
(1) Nationwide
(AP-DRGs)
(2) Region-wide (CMS-DRGs)
Sweden Relative weight Nationwide, county-specific (some counties)
DRGs in Europe: Moving towards transparency, efficiency and quality in hospitals17 November 2011
How European DRG systems reduce unintended
behaviour: 1. long- and short-stay adjustments
Revenues
Short-stay outliers
Long-stay outliers
InliersActual
reimbursement
LOSDeductions(per day)
Surcharges(per day)
Lower LOSthreshold
Upper LOSthreshold
• Volume limits
• Outliers
• High cost cases
• Quality• Innovations
• Negotiations
23DRGs in Europe: Moving towards transparency, efficiency and quality in hospitals17 November 2011
24DRGs in Europe: Moving towards transparency, efficiency and quality in hospitals17 November 2011
How European DRG systems reduce unintended
behaviour: 3. adjustments for quality
Actual
reimbursement
• England & Germany: no extra payment if
patient readmitted within 30 days
• Germany: deduction for not submitting quality • Volume limits
• Outliers• High cost cases
• Quality
• Innovations
• Negotiations
• Germany: deduction for not submitting quality
data
• England: up 1.5% reduction if quality
standards are not met
• France: extra payments for quality
improvement (e.g. regarding MRSA)
25DRGs in Europe: Moving towards transparency, efficiency and quality in hospitals17 November 2011
4. Frequent revisions of PCS and payment rates
Country PCS Payment rate
Frequency of updates Time-lag to data Frequency of updates Time-lag to data
Austria Annual 2–4 years 4–5 years 2–4 years
England Annual Minor revisions annually; irregular
overhauls about every 5–6 years
Annual 3 years (but adjusted for
inflation)
Estonia Irregular (first update
after 7 years)
1–2 years Annual 1–2 years
Finland Annual 1 year Annual 0–1 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 1–2 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 2–3 years
Spain (Catalonia) Biennial Not applicable (imported
3-year-old CMS-DRGs)
Annual 2–3 years
Sweden Annual 1–2 years Annual 2 years
26DRGs in Europe: Moving towards transparency, efficiency and quality in hospitals17 November 2011
How do DRG systems deal with innovations?
Actual
reimbursement
27DRGs in Europe: Moving towards transparency, efficiency and quality in hospitals17 November 2011
• Volume limits
• Outliers• High cost cases
• Quality• Innovations
• Negotiations
Conclusions so far
• DRG-based hospital payment is the main method of provider payment in Europe, but systems vary across countries– Different patient classification systems
– DRG-based budget allocation vs. case-payment
– Regional/local adjustment of cost weights/conversion rates
• To address potential unintended consequences, countries– implemented DRG systems in a step-wise manner – implemented DRG systems in a step-wise manner
– operate DRG-based payment together with other payment mechanisms
– refine patient classification systems continously (increase number of groups)
– place a comparatively high weight on procedures
– base payment rates on actual average (or best-practice) costs
– reimburse outliers and and high cost services separately
– update both patient classification and payment rates regularly
• If done right (which is complex), DRGs can contribute to increased transparency and efficiency – and possibly quality
28DRGs in Europe: Moving towards transparency, efficiency and quality in hospitals17 November 2011
EuroDRG project partners
Austria Department for Medical Statistics, Informatics and Health Economics, Innsbruck Medical University
England/ UK Centre for Health Economics, University of York
Estonia PRAXIS Center for Policy Studies, Tallinn
Europe European Health Management Association, Brussels
Finland National Institute for Health and Welfare , Helsinki
France École des hautes études en santé publique, Rennes &Institut de recherche et documentation en économie de la santé, Paris
Germany Department of Health Care Management, Technische Universität Berlin
Ireland Economic and Social Research Institute, Dublin
Netherlands Institute for Health Policy & Management, Erasmus Universitair Medisch Centrum Rotterdam
Poland National Health Fund, Warsaw
Portugal Avisory board member Céu Mateus
Spain Institut Municipal d’Assistència Sanitària, Barcelona
Sweden Centre for Patient Classification, National Board of Health and Welfare, Stockholm
29DRGs in Europe: Moving towards transparency, efficiency and quality in hospitals17 November 2011
EuroDRG consortium members
Picture: 22nd January 2010, Paris
30DRGs in Europe: Moving towards transparency, efficiency and quality in hospitals17 November 2011
