Cost accounting to determine prices: how well do prices reflect costs in the German DRG-system?

Comparison of Externally Transferred and Self-Recruited Patients with Hip and Knee Revision Arthroplasty at a Certified Maximum-Care Arthroplasty Center (ACmax)

BACKGROUND/OBJECTIVES

According to the guidelines of the EndoCert initiative, certified maximum-care arthroplasty centers (ACmax) are obliged to admit patients from certified arthroplasty centers (AC) if these patients need to be transferred to the more specialized ACmax due to difficult replacement and revision procedures as well as after complications in primary care that are beyond the expertise of the smaller centers. This study investigated whether the cohort of transferred patients differed from the patients directly recruited at the ACmax for factors such as severity of diagnosis, comorbidities or outcome. The aim was to determine whether transferred patients increased the resource requirements for the ACmax.

METHODS

A total of 136 patients were included in the retrospective study and analyzed in terms of case severity, length of hospital stays (LOS), Diagnosis-Related Group charges, readmission rate and concomitant diseases. All patients were followed for up to 12 months after the initial hospital stay.

RESULTS

There were significant differences between the groups of transferred and self-recruited patients. For example, transferred patients had a higher Patient Clinical Complexity Level (PCCL). Similarly, the increased Case Mix Index (CMI) of transferred patients indicated more intensive care during the inpatient stay. The higher values for the comorbidity indices also supported these results. This had an impact on the LOS and overall costs, too. The differences between the groups were also reflected by adverse events during the one-year follow-up. The higher percentage of patients with septic revisions, whose treatment is especially demanding, among transferred patients aggravated the differences even further. Thus, transferred patients were associated with increased resource requirements for the ACmax.

CONCLUSIONS

While it serves patients' safety to transfer them to an ACmax with specialized expertise and greater structural quality, the care of transferred patients ties up considerable resources at the ACmax that might only be insufficiently reimbursed by the generalized tariffs.

Country-level effects of diagnosis-related groups: evidence from Germany's comprehensive reform of hospital payments

Hospitals account for about 40% of all healthcare expenditure in high-income countries and play a central role in healthcare provision. The ways in which they are paid, therefore, has major implications for the care they provide. However, our knowledge about reforms that have been made to the various payment schemes and their country-level effects is surprisingly thin. This study examined the uniquely comprehensive introduction of diagnosis-related groups (DRGs) in Germany, where DRGs function as the sole pricing, billing, and budgeting system for hospitals and almost exclusively determine hospital revenue. The introduction of DRGs, therefore, completely overhauled the previous system based on per diem rates, offering a unique opportunity for analysis. Using aggregate data from the Organisation for Economic Co-operation and Development and recent advances in econometrics, we analyzed how hospital activity and efficiency changed in response to the reform. We found that DRGs in Germany significantly increased hospital activity by around 20%. In contrast to earlier studies, we found that DRGs have not necessarily shortened the average length of stay.

Tackling the frailty burden with an integrative value-based approach: results from a mixed-methods study

Aim

The purpose of this paper is to investigate the implementation of value-based care principles in the context of frailty in the perioperative process, highlighting the importance of an integrative perspective considering medical and patient-centric outcomes as well as costs.

Subject and methods

This mixed-methods study employs a sequential design. Qualitative observational data were used to identify needs and barriers for implementing value-based principles, and quantitative methods were subsequently used to demonstrate the value of employing such an approach using data gathered from n = 952 patients. Propensity score matching was applied to identify the frailty-associated costs of the inpatient setting for n = 381 non-frail and n = 381 (pre-)frail patients, in particular considering patient-centric outcomes.

Results

The qualitative analysis identified three main challenges when implementing value-based principles in the context of perioperative care and frailty, namely challenges related to the cost, patient-centric, and integrative perspectives. In addressing these shortcomings, a quantitative analysis of a propensity score-matched sample of patients undergoing surgery shows additional frailty-associated costs of 3583.01 [1654.92; 5511.04] EUR for (pre-)frail patients and the influence of individual patient-centric attributes. Effect size Cohen’s d was 0.26.

Conclusion

The results demonstrate that frailty should be considered from an integrative perspective, taking cost, patient-centered outcomes, and medical outcomes into account simultaneously. The results also show the value of a research design which uses qualitative data for the identification of needs and barriers, as well as quantitative data for demonstrating the usefulness of the conceived value-based approach to perioperative care delivery.

A Game Model for Medical Service Pricing Based on the Diagnosis Related Groups

Background: Currently there are various issues that exist in the medical institutions in China as a result of the price-setting in DRGs, which include the fact that medical institutions tend to choose patients and that the payment standard for complex cases cannot reasonably compensate the cost.

Objective: The main objective is to prevent adverse selection problems in the operations of a diagnosis-related groups (DRGs) system with the game pricing model for scientific and reasonable pricing.

Methods: The study proposes an improved bargaining game model over three stages, with the government and patients forming an alliance. The first stage assumes the alliance is the price maker in the Stackelberg game to maximize social welfare. Medical institutions are a price taker and decide the level of quality of medical service to maximize their revenue. A Stackelberg equilibrium solution is obtained. The second stage assumes medical institutions dominate the Stackelberg game and set an optimal service quality for maximizing their revenues. The alliance as the price taker decides the price to maximize the social welfare. Another Stackelberg equilibrium solution is achieved. The final stage establishes a Rubinstein bargaining game model to combine the Stackelberg equilibrium solutions in the first and second stage. A new equilibrium between the alliance and medical institutions is established.

Results: The results show that if the price elasticity of demand increases, the ratio of cost compensation on medical institutions will increase, and the equilibrium price will increase. The equilibrium price is associated with the coefficient of patients' quality preference. The absolute risk aversion coefficient of patients affects government compensation and total social welfare.

Conclusion: In a DRGs system, considering the demand elasticity and the quality preference of patients, medical service pricing can prevent an adverse selection problem. In the future, we plan to generalize these models to DRGs pricing systems with the effects of competition of medical institutions. In addition, we suggest considering the differential compensation for general hospitals and community hospitals in a DRGs system, in order to promote the goal of hierarchical diagnosis and treatment.

The 2019 introduction of the new National Healthcare System in Cyprus

In 2019, Cyprus launched its new National Healthcare System (NHS) as one of the major structural reforms required by the bail-out agreement with the International Monetary Fund, the European Commission and the European Central Bank (known as the Troika) which averted Cyprus bankruptcy in 2011. This paper presents the key features of the new NHS: A National Health Insurance Fund operated by the Health Insurance Organisation pays for services provided by a mix of public and private providers. A prerequisite for the establishment of this new quasi-market was the transfer of public hospitals from the Ministry of Health to the new State Health Services Organisation, thus establishing a purchaser-provider and regulator split. The first implementation phase started in June 2019 and introduced coverage of outpatient healthcare services for the entire population, providing access - with relatively small user charges - to family physicians, outpatient specialists, pharmaceuticals and laboratories. The second implementation phase began in June 2020 with the inclusion of hospital care, followed by the inclusion of specialty pharmaceuticals in September and was completed in December 2020. The reform is a vital achievement as it is a major step towards the goal of universal health coverage, reducing the excessive reliance on out-of-pocket payment and glaring inequities in access to care.

The development of inpatient cost and nursing service weights in a tertiary hospital in Malaysia

Background

The current healthcare sector consists of diverse services to accommodate the high demands and expectations of the users. Nursing plays a major role in catering to these demands and expectations, but nursing costs and service weights are underestimated. Therefore, this study aimed to estimate the nursing costs and service weights as well as identify the factors that influence these costs.

Methods

A retrospective cross-sectional descriptive study was conducted at Universiti Kebangsaan Malaysia Medical Centre (UKMMC) using 85,042 hospital discharges from 2009 to 2012. A casemix costing method using the step-down approach was used to derive the nursing costs and service weights. The cost analysis was performed using the hospital data obtained from five departments of the UKMMC: Finance, Human Resource, Nursing Management, Maintenance and Medical Information. The costing data were trimmed using a low trim point and high trim point (L3H3) method.

Results

The highest nursing cost and service weights for medical cases were from F-4-13-II (bipolar disorders including mania - moderate, RM6,129; 4.9871). The highest nursing cost and service weights for surgical cases were from G-1-11-III (ventricular shunt - major, RM9,694; 7.8880). In obstetrics and gynaecology (O&G), the highest nursing cost and service weights were from O-6-10-III (caesarean section - major, RM2,515; 2.0467). Finally, the highest nursing cost and service weights for paediatric were from P-8-08-II (neonate birthweight > 2499 g with respiratory distress syndrome congenital pneumonia - moderate, RM1,300; 1.0582). Multiple linear regression analysis showed that nursing hours were significantly related to the following factors: length of stay (β = 7.6, p < 0.05), adult (β = − 6.0, p < 0.05), severity level I (β = − 3.2, p < 0.05), severity level III (β = 7.3, p < 0.05), male gender (β = − 4.2, p < 0.05), and the elderly (β = − 0.5, p < 0.05).

Conclusions

The results showed that nursing cost and service weights were higher in surgical cases compared to other disciplines such as medical, O&G and paediatric. This is possible as there are significant differences in the nursing activities and work processes between wards and specialities.

Comparative analysis of resource utilization in integrative anthroposophic and all German pediatric inpatient departments

BACKGROUND

Integrative Medicine (IM) combines conventional and complementary therapies. It aims to address biological, psychological, social, spiritual and environmental aspects of patients' health. During the past 20 years, the use and request of IM in children and adults has grown. Anthroposophic Medicine (AM) is an IM approach frequently used in children in Germany. From both public health and health economic perspectives, it is relevant to investigate whether there are differences in the resource utilization between integrative pediatric departments (IPD) and the entirety of all pediatric departments.

METHODS

Standard ward documentation data from all German integrative anthroposophic pediatric departments (2005-2016; N = 29,956) is investigated and systematically compared to data of the entirety of all pediatric departments in Germany derived from the Institute for the Hospital Reimbursement System (2005-2016, N = 8,645,173). The analyses focus on: length of stay, Diagnosis Related Groups (DRG), Major Diagnosis Categories (MDC), and effective Case Mix Index (CMI).

RESULTS

The length of stay in the IPD (M = 5.38 ± 7.31) was significantly shorter than the DRG defined length of stay (M = 5.8 ± 4.71; p < .001; d = - 0.07) and did not exceed or undercut the DRG covered length of stay. Compared to the entirety of all pediatric departments (M = 4.74 ± 6.23) the length of stay was significantly longer in the in the IPD (p <. 001; d = 0.12). The effective CMI in IPD and all pediatric departments were identical (M = 0.76). The frequencies of DRG and MDC differed between IPD and all pediatric departments, with higher frequencies of DRGs and MDCs associated with chronic and severe illnesses in the IPD.

CONCLUSIONS

Treatment within integrative anthroposophic pediatric departments fits well in terms of the DRG defined conditions concerning length of stay, even though integrative pediatric patients has an increased length of stay of averagely 1 day, which is most likely associated to time consuming, complex integrative treatment approaches and to a certain extend to higher amount of chronic and severe diseases.

[Influence of a spontaneous bacterial peritonitis, nosocomial infections and acute-on-chronic liver failure on treatment revenues in patients with decompensated cirrhosis in Germany]

BACKGROUND

 The economic effects of spontaneous bacterial peritonitis (SBP), nosocomial infections (nosInf) and acute-on-chronic liver failure (ACLF) have so far been poorly studied. We analyzed the impact of these complications on treatment revenues in hospitalized patients with decompensated cirrhosis.

METHODS

 371 consecutive patients with decompensated liver cirrhosis, who received a paracentesis between 2012 and 2016, were included retrospectively. DRG (diagnosis-related group), "ZE/NUB" (additional charges/new examination/treatment methods), medication costs, length of hospital stay as well as different kinds of specific treatments (e. g., dialysis) were considered. Exclusion criteria included any kind of malignancy, a history of organ transplantation and/or missing accounting data.

RESULTS

 Total treatment costs (DRG + ZE/NUB) were higher in those with nosInf (€ 10,653 vs. € 5,611, p < 0.0001) driven by a longer hospital stay (23 d vs. 12 d, p < 0.0001). Of note, revenues per day were not different (€ 473 vs. € 488, p = 0.98) despite a far more complicated treatment with a more frequent need for dialysis (p < 0.0001) and high-complex care (p = 0.0002). Similarly, SBP was associated with higher total revenues (€ 10,307 vs. € 6,659, p < 0.0001). However, the far higher effort for the care of SBP patients resulted in lower daily revenues compared to patients without SBP (€ 443 vs. € 499, p = 0.18). ACLF increased treatment revenues to € 10,593 vs. €6,369 without ACLF (p < 0.0001). While treatment of ACLF was more complicated, revenue per day was not different to no-ACLF patients (€ 483 vs. € 480, p = 0.29).

CONCLUSION

 SBP, nosInf and/or ACLF lead to a significant increase in the effort, revenue and duration in the treatment of patients with cirrhosis. The lower daily revenue, despite a much more complex therapy, might indicate that these complications are not yet sufficiently considered in the German DRG system.

The economic burden of endoscopic treatment for anastomotic leaks following oncological Ivor Lewis esophagectomy

Background

Complications after surgery for esophageal cancer are associated with significant resource utilization. The aim of this study was to analyze the economic burden of two frequently used endoscopic treatments for anastomotic leak management after esophageal surgery: Treatment with a Self-expanding Metal Stent (SEMS) and Endoscopic Vacuum Therapy (EVT).

Materials and methods

Between January 2012 and December 2016, we identified 60 German-Diagnosis Related Group (G-DRG) cases of patients who received a SEMS and / or EVT for esophageal anastomotic leaks. Direct costs per case were analyzed according to the Institute for Remuneration System in Hospitals (InEK) cost-accounting approach by comparing DRG payments on the case level, including all extra fees per DRG catalogue.

Results

In total, 60 DRG cases were identified. Of these, 15 patients were excluded because they received a combination of SEMS and EVT. Another 6 cases could not be included due to incomplete DRG data. Finally, N = 39 DRG cases were analyzed from a profit-center perspective. A further analysis of the most frequent DRG code -G03- including InEK cost accounting, revealed almost twice the deficit for the EVT group (N = 13 cases, € - 9.282 per average case) compared to that for the SEMS group (N = 9 cases, € - 5.156 per average case).

Conclusion

Endoscopic treatments with SEMS and EVT for anastomotic leaks following oncological Ivor Lewis esophagectomies are not cost-efficient for German hospitals. Due to longer hospitalization and insufficient reimbursements, EVT is twice as costly as SEMS treatment. An adequate DRG cost compensation is needed for SEMS and EVT.

White Coats at the Coalface: The Standardizing Work of Professionals at the Frontline

This study advances theory on professionals by introducing a novel ‘coalface perspective’ to study frontline professionals’ standardizing work. Our multimethod quantitative and qualitative approach explores when, why and how medical professionals in German university hospitals actively maintain care pathway enactment – a technique to standardize day-to-day medical work – in their everyday patient treatment. Professionals’ actively standardizing their work is an understudied yet highly relevant phenomenon that the established ‘autonomy perspective’ – which covers how professionals resist standardization – falls short of explaining. Introducing a coalface perspective overcomes this shortcoming by uncovering novel links between professionals’ day-to-day problem-driven motivations for standardizing work, the characteristics of everyday situations of frontline professional work and practices of standardizing work at the frontline. This study has implications for research on frontline professionals and coalface-perspective research in general.

Estimating the additional costs per life saved due to transcatheter aortic valve replacement: a secondary data analysis of electronic health records in Germany

Aortic stenosis (AS) is the most common valvular heart disease, with a dismal prognosis when untreated. Recommended therapy is surgical (SAVR) or transcatheter (TAVR) aortic valve replacement. Based on a retrospective cohort of isolated SAVR and TAVR procedures performed in Germany in 2015 (N = 17,826), we examine the impact of treatment selection on in-hospital mortality and total in-hospital costs for a variety of at-risk populations. Since patients were not randomized to the two treatment options, the two endpoints in-hospital mortality and reimbursement are analyzed using logistic and linear regression models with 20 predefined patient characteristics as potential confounders. Incremental cost-effectiveness ratios were calculated as a ratio of the risk-adjusted reimbursement and mortality differences with 95% confidence intervals obtained by Fieller's theorem. Our study shows that TF-TAVR is more costly that SAVR and that cost differences between the procedures vary little between patient groups. Results regarding in-hospital mortality are mixed. SAVR is the predominant procedure among younger patients. For patients older than 85 years or at intermediate and higher pre-operative risk TF-TAVR seems to be the treatment of choice. Incremental cost-effectiveness ratios (ICER) are most favorable for patients older than 85 years (ICER €154,839, 95% CI €89,163-€302,862), followed by patients at higher pre-operative risk (ICER €413,745, 95% CI €258,027-€952,273). A hypothetical shift from SAVR towards TF-TAVR among patients at intermediate pre-operative risk is associated with a less favorable ICER (€1,486,118, 95% CI €764,732-€23,692,323), as the risk-adjusted mortality benefit is relatively small (- 0.97% point), while the additional reimbursement is still eminent (+€14,464). From a German healthcare system payer's perspective, the additional costs per life saved due to TAVR are most favorable for patients older than 85 and/or at higher pre-operative risk.

A method for analyzing inpatient care variability through physicians' orders

OBJECTIVE

Administrators assess care variability through chart review or cost variability to inform care standardization efforts. Chart review is costly and cost variability is imprecise. This study explores the potential of physician orders as an alternative measure of care variability.

MATERIALS & METHODS

The authors constructed an order variability metric from adult Vanderbilt University Hospital patients treated between 2013 and 2016. The study compared how well a cost variability model predicts variability in the length of stay compared to an order variability model. Both models adjusted for covariates such as severity of illness, comorbidities, and hospital transfers.

RESULTS

The order variability model significantly minimized the Akaike information criterion (superior outcome) compared to the cost variability model. This result also held when excluding patients who received intensive care.

CONCLUSION

Order variability can potentially typify care variability better than cost variability. Order variability is a scalable metric, calculable during the course of care.

The impact of post-procedural complications on reimbursement, length of stay and mechanical ventilation among patients undergoing transcatheter aortic valve implantation in Germany

BACKGROUND

The impact of various post-procedural complications after transcatheter aortic valve implantation (TAVI) on resource use and their consequences in the German reimbursement system has still not been properly quantified.

METHODS

In a retrospective observational study, we use data from the German DRG statistic on patient characteristics and in-hospital outcomes of all isolated TAVI procedures in 2013 (N = 9147). The impact of post-procedural complications on reimbursement, length of stay and mechanical ventilation was analyzed using both unadjusted and risk-adjusted linear and logistic regression analyses.

RESULTS

A total of 235 (2.57%) strokes, 583 (6.37%) bleeding events, 474 (5.18%) cases of acute kidney injury and 1428 (15.61%) pacemaker implantations were documented. The predicted reimbursement of an uncomplicated TAVI procedure was €33,272, and bleeding events were associated with highest additional reimbursement (€12,839, p < 0.001), extra length of stay (14.58 days, p < 0.001), and increased likelihood of mechanical ventilation for more than 48 h (OR 17.91, p < 0.001). A more moderate complication-related impact on resource use and reimbursement was found for acute kidney injury (additional reimbursement: €5963, p < 0.001; extra length of stay: 7.92 days, p < 0.001; ventilation >48 h: OR 6.93, p < 0.001) as well as for stroke (additional reimbursement: €4125, p < 0.001; extra length of stay: 4.68 days, p < 0.001; ventilation >48 h: OR 5.73, p < 0.001). Pacemaker implantations, in contrast, were associated with comparably small increases in reimbursement (€662, p = 0.006) and length of stay (3.54 days, p = 0.006) and no impaired likelihood of mechanical ventilation more than 48 h (OR 1.22, p = 0.156). Interestingly, these complication-related consequences remain mostly unchanged after baseline risk-adjustment.

CONCLUSIONS

Post procedural complications such as bleeding events, acute kidney injuries and strokes are associated with increased resource use and substantial amounts of additional reimbursement in Germany, which has important implications for decision making outside of the usual clinical sphere.

Cost-effectiveness of 3-month paliperidone therapy for chronic schizophrenia in the Netherlands

BACKGROUND

A new depot formulation of paliperidone has been developed that provides effective treatment for schizophrenia for 3 months (PP3M). It has been tested in phase-3 trials, but no data on its cost-effectiveness have been published.

PURPOSE

To determine the cost-effectiveness of PP3M compared with once-monthly paliperidone (PP1M), haloperidol long-acting therapy (HAL-LAT), risperidone microspheres (RIS-LAT), and oral olanzapine (oral-OLZ) for treating chronic schizophrenia in The Netherlands.

METHODS

A previous 1-year decision tree was adapted, based on local inputs supplemented with data from published literature. The primary analysis used DRG costs in 2016 euros from the insurer perspective, as derived from official lists. A micro-costing analysis was also conducted. For the costing scenario, official list prices were used. Clinical outcomes included relapses (treated as outpatients, requiring hospitalization, total), and quality-adjusted life-years (QALYs). Rates and utility scores were derived from the literature. Economic outcomes were the incremental cost/QALY-gained or relapse-avoided. Model robustness was examined in scenario, 1-way, and probability sensitivity analyses.

RESULTS

The expected cost was lowest with PP3M (8,781€), followed by PP1M (10,325€), HAL-LAT (11,278€), RIS-LAT (11,307€), and oral-OLZ (13,556€). PP3M had the fewest total relapses/patient (0.36, 0.94, 1.39, 1.21, and 1.70, respectively), hospitalizations (0.11, 0.46, 0.40, 0.56, and 0.57, respectively), emergency room visits (0.25, 0.48. 0.99, 0.65, and 1.14, respectively) and the most QALYs (0.847, 0.735, 0.709, 0.719, and 0.656, respectively). In both cost-effectiveness and cost-utility analyses, PP3M dominated all other drugs. Sensitivity analyses confirmed base case findings. In the costing analysis, total costs were, on average, 31.9% higher than DRGs.

CONCLUSIONS

PP3M dominated all commonly used drugs. It is cost-effective for treating chronic schizophrenia in the Netherlands. Results were robust over a wide range of sensitivity analyses. For patients requiring a depot medication, such as those with adherence problems, PP3M appears to be a good alternative anti-psychotic treatment.

Efficiency of physician specialist groups

This is the first study to use stochastic frontier analysis to simultaneously estimate the technical, cost and profit efficiency of physician practices for different physician specialist groups. We base our analysis on a unique panel data set of 4964 physician practices in Germany for the years 2008 to 2010. The data contains information on practice costs and revenues, services provided, as well as physician characteristics and practice characteristics. Additionally we consider a wide range additional variables not previously analyzed in this context (e.g. sub-specialization of physician groups and environmental factors such as physician density in the area). We investigate differences in cost, technical and profit efficiency utilizing production-/cost- and profit-functions with a translog functional form. We estimated the stochastic frontier using the comprehensive one-step approach for panel data following Battese and Coelli (Empir Econ 20(2): 325-332, 10). Overall findings indicate that participation in disease management programs and the degree of specialization are associated with significantly higher technical- cost-, and profit-efficiency for most physician specialist groups, e.g. due to the standardization of processes. In addition, our analyses show that group practices perform significantly better than single practices. This may be due to indivisibilities in expensive technical equipment, which can lead to different health care services being provided by different practice types. A more thorough look at specialist groups suggests that it is important to investigate all efficiency types for different physician groups, as results may depend on the type of efficiency analyzed as well as the physician group in question.

Economic evaluation of chronic lymphocytic leukemia from a hospital management perspective

OBJECTIVES

Treatment of chronic lymphocytic leukemia (CLL) is currently undergoing dramatic changes. We analyzed economic risks in hospitalized patients with CLL from a management perspective.

METHODS

One hundred and twelve patients with CLL hospitalized in 2013 and 2014 at the University Hospital of Cologne were analyzed. To assess profit margins (PMs) per case, diagnosis-related group (DRG) reimbursement data were merged with an internal cost accounting scheme depending on age, prognostic factors, and DRG key performance indicators.

RESULTS

In 112 patients, 284 cases coded by 19 different DRG with strongly fluctuating cost revenue ratios were found with an overall negative PM of €137 147. The DRG R61H was identified as the one most commonly coded (174 cases, 61.3%) with a deficit per case of €814. Subanalysis demonstrated that the payments were not cost covering due to excessive length of stay and staff costs. Significant differences in PM per case concerning age, length of stay and number of operation and procedure key (OPS) codes (P < 0.05) were found.

CONCLUSION

In our research-driven tertiary care hospital, inpatient treatment of patients with CLL is not cost covering. This analysis demonstrates the need for novel care/reimbursement structures in CLL. From a hospital management perspective, cost revenue controlling is crucial to avoid major economic risks.

Out of pocket payments and social health insurance for private hospital care: Evidence from Greece

The Greek state has reduced their funding on health as part of broader efforts to limit the large fiscal deficits and rising debt ratios to GDP. Benefits cuts and limitations of Social Health Insurance (SHI) reimbursements result in substantial Out of Pocket (OOP) payments in the Greek population. In this paper, we examine social health insurance's risk pooling mechanisms and the catastrophic impact that OOP payments may have on insured's income and well-being. Using data collected from a cross sectional survey in Greece, we find that the OOP payments for inpatient care in private hospitals have a positive relationship with SHI funding. Moreover, we show that the SHI funding is inadequate to total inpatient financing. We argue that the Greek health policy makers have to give serious consideration to the perspective of a SHI system which should be supplemented by the Private Health Insurance (PHI) sector.

Informing management on the future structure of hospital care: an extrapolation of trends in demand and costs in lung diseases

OBJECTIVE

The planning of health care management benefits from understanding future trends in demand and costs. In the case of lung diseases in the national German hospital market, we therefore analyze the current structure of care, and forecast future trends in key process indicators.

METHODS

We use standardized, patient-level, activity-based costing from a national cost calculation data set of respiratory cases, representing 11.9-14.1 % of all cases in the major diagnostic category "respiratory system" from 2006 to 2012. To forecast hospital admissions, length of stay (LOS), and costs, the best adjusted models out of possible autoregressive integrated moving average models and exponential smoothing models are used.

RESULTS

The number of cases is predicted to increase substantially, from 1.1 million in 2006 to 1.5 million in 2018 (+2.7 % each year). LOS is expected to decrease from 7.9 to 6.1 days, and overall costs to increase from 2.7 to 4.5 billion euros (+4.3 % each year). Except for lung cancer (-2.3 % each year), costs for all respiratory disease areas increase: surgical interventions +9.2 % each year, COPD +3.9 %, bronchitis and asthma +1.7 %, infections +2.0 %, respiratory failure +2.6 %, and other diagnoses +8.5 % each year. The share of costs of surgical interventions in all costs of respiratory cases increases from 17.8 % in 2006 to 30.8 % in 2018.

CONCLUSIONS

Overall costs are expected to increase particularly because of an increasing share of expensive surgical interventions and rare diseases, and because of higher intensive care, operating room, and diagnostics and therapy costs.

Early decision-analytic modeling - a case study on vascular closure devices

Background

As economic considerations become more important in healthcare reimbursement, decisions about the further development of medical innovations need to take into account not only medical need and potential clinical effectiveness, but also cost-effectiveness. Already early in the innovation process economic evaluations can support decisions on development in specific indications or patient groups by anticipating future reimbursement and implementation decisions. One potential concept for early assessment is value-based pricing.

Methods

The objective is to assess the feasibility of value-based pricing and product design for a hypothetical vascular closure device in the pre-clinical stage which aims at decreasing bleeding events. A deterministic decision-analytic model was developed to estimate the cost-effectiveness of established vascular closure devices from the perspective of the Statutory Health Insurance system. To identify early benchmarks for pricing and product design, three strategies of determining the product’s value are explored: 1) savings from complications avoided by the new device; 2) valuation of the avoided complications based on an assumed willingness-to-pay-threshold (the efficiency frontier approach); 3) value associated with modifying the care pathways within which the device would be applied.

Results

Use of established vascular closure devices is dominated by manual compression. The hypothetical vascular closure device reduces overall complication rates at higher costs than manual compression. Maximum cost savings of only about €4 per catheterization could be realized by applying the hypothetical device. Extrapolation of an efficiency frontier is only possible for one subgroup where vascular closure devices are not a dominated strategy. Modifying care in terms of same-day discharge of patients treated with vascular closure devices could result in cost savings of €400-600 per catheterization.

Conclusions

It was partially feasible to calculate value-based prices for the novel closure device which can be used to inform product design. However, modifying the care pathway may generate much more value from the payers’ perspective than modifying the device per se. Manufacturers should thus explore the feasibility of combining reimbursement of their product with arrangements that make same-day discharge attractive also for hospitals. Due to the early nature of the product, the results are afflicted with substantial uncertainty.

Quality-based procedures in Ontario: exploring health-care leaders' responses

AIM

To examine health-care leaders' initial response to the implementation of orthopaedic quality based procedures (QBPs) in hospitals across Ontario, Canada.

BACKGROUND

In 2012, Ontario, Canada shifted 91 hospitals to a patient-based funding (PBF) approach. This approach funds health-care organisations based on the number of patients treated with select procedures known as QBPs.

METHODS

An exploratory descriptive design was employed to better understand health-care leaders' early implementation experiences. Seventy organisational leaders from 20 hospitals participated in six focus groups and four interviews to discuss their initial responses to the implementation of two QBPs (primary unilateral hip replacement and primary unilateral knee replacement). Qualitative data underwent content analysis.

FINDINGS

Three key major themes emerged; (1) responding to change, (2) leading the change and (3) managing the change. Within each of these themes, barriers and benefits were identified.

CONCLUSION

Leaders are accepting of PBF and QBPs. However, challenges exist that require further exploration including the need for a strong infrastructure, accurate and timely clinical and financial data, and policies to prevent unintended consequences.

IMPLICATIONS FOR NURSING MANAGEMENT

Implementing QBPs requires careful planning, adequate and appropriate resources, vertical and horizontal communication strategies, and policies to ensure that unintended consequences are avoided and positive outcomes achieved.

The role of hospital payments in the adoption of new medical technologies: an international survey of current practice

This study examined the role of prospective payment systems in the adoption of new medical technologies across different countries. A literature review was conducted to provide background for the study and guide development of a survey instrument. The survey was disseminated to hospital payment systems experts in 15 jurisdictions. Fifty-one surveys were disseminated, with 34 returned. The surveys returned covered 14 of the 15 jurisdictions invited to participate. The majority (71%) of countries update the patient classification system and/or payment tariffs on an annual basis to try to account for new technologies. Use of short-term separate or supplementary payments for new technologies occurs in 79% of countries to ensure adequate funding and facilitate adoption. A minority (43%) of countries use evidence of therapeutic benefit and/or costs to determine or update payment tariffs, although it is somewhat more common in establishing short-term payments. The main barrier to using evidence is uncertain or unavailable clinical evidence. Almost three-fourths of respondents believed diagnosis-related group systems incentivize or deter technology adoption, depending on the particular circumstances. Improvements are needed, such as enhanced strategies for evidence generation and linking evidence of value to payments, national and international collaboration and training to improve existing practice, and flexible timelines for short-term payments. Importantly, additional research is needed to understand how different payment policies impact technology uptake as well as quality of care and costs.

Employment effects of hospital privatization in Germany

The main argument for the ongoing privatization process is that privatization will lead to an increase in efficiency, which has been confirmed by a large number of studies. An important argument against privatization is that privatization may lead to employment reductions. In the hospital sector, potential employment reductions might also lead to a decrease in the quality of care. This is the first study to investigate the employment effects of different types of hospital privatization (i.e., for-profit vs non-profit privatization) on different categories of staff. A combination of propensity score matching and difference-in-difference methods was used to identify the causal effect. We found large employment reductions after for-profit privatization, while there were no permanent reductions after non-profit privatization. Moreover, even for-profit privatization does not affect all types of staff. While there are large reductions in non-clinical staff, we could not detect any reduction in the number of physicians. The consequences of the detected employment effects of privatization have to be addressed in greater detail in future research.

Measuring the relationship between costs and outcomes: the example of acute myocardial infarction in German hospitals

In this paper, we propose a methodological approach to measure the relationship between hospital costs and health outcomes. We propose to investigate the relationship for each condition or disease area by using patient-level data. We examine health outcomes as a function of costs and other patient-level variables by using the following: (1) two-stage residual inclusion with Murphy-Topel adjustment to address costs being endogenous to health outcomes, (2) random-effects models in both stages to correct for correlation between observation, and (3) Cox proportional hazard models in the second stage to ensure that the available information is exploited. To demonstrate its application, data on mortality following hospital treatment for acute myocardial infarction (AMI) from a large German sickness fund were used. Provider reimbursement was used as a proxy for treatment costs. We relied on the Ontario Acute Myocardial Infarction Mortality Prediction Rules as a disease-specific risk-adjustment instrument. A total of 12,284 patients with treatment for AMI in 2004-2006 were included. The results showed a reduction in hospital costs by €100 to increase the hazard of dying, that is, mortality, by 0.43%. The negative association between costs and mortality confirms that decreased resource input leads to worse outcomes for treatment after AMI.

Determinants of inpatient costs of angina pectoris, myocardial infarction, and heart failure in a university hospital setting in Turkey

Objective:

This study aimed to determine the correlates of in-hospital costs for angina pectoris (AP), myocardial infarction (MI), and heart failure (HF) in a university hospital setting.

Methods:

This is a retrospective cost-of-illness study using data from the records of patients who were admitted with AP, MI, or HF to Dokuz Eylül University Hospital during 2008. Direct medical costs were calculated from the Social Security Institute perspective using a bottom-up approach. Socio-demographic and clinical information was abstracted from patient files. Costs were presented in Turkish lira (TL). A generalized linear model was used in the multivariate analysis.

Results:

We included 337 in-patients in total in the study. AP was present in 26.4% (n=89), MI was present in 55.8% (n=188), and HF was present in 17.8% (n=60) of patients. MI was the most costly disease (2760 TL), followed by HF (2350 TL) and AP (1881 TL). The largest proportion of the total cost was formed by medical interventions (27.5%), followed by surgery (22.2%). Presence of DM, smoking, diagnosis of MI, HF, need for intensive care, and resulting in death were strong predictors of treatment costs.

Conclusion:

Both preadmission characteristics of patients (diabetes mellitus, smoking, use of anti-aggregant before admission) and in-patient characteristics (diagnosis, coronary artery bypass grafting, intensive care need, death) predicted the hospital cost of cardiovascular diseases (CVDs) independently. Our results may be used as input for health-economic models and economic evaluations to support the decision-making of reimbursement and the cost-effectiveness of public health interventions in healthcare.

Hospital financing: calculating inpatient capital costs in Germany with a comparative view on operating costs and the English costing scheme

OBJECTIVES

The paper analyzes the German inpatient capital costing scheme by assessing its cost module calculation. The costing scheme represents the first separated national calculation of performance-oriented capital cost lump sums per DRG.

METHODS

The three steps in the costing scheme are reviewed and assessed: (1) accrual of capital costs; (2) cost-center and cost category accounting; (3) data processing for capital cost modules. The assessment of each step is based on its level of transparency and efficiency. A comparative view on operating costing and the English costing scheme is given.

RESULTS

Advantages of the scheme are low participation hurdles, low calculation effort for G-DRG calculation participants, highly differentiated cost-center/cost category separation, and advanced patient-based resource allocation. The exclusion of relevant capital costs, nontransparent resource allocation, and unclear capital cost modules, limit the managerial relevance and transparency of the capital costing scheme.

CONCLUSIONS

The scheme generates the technical premises for a change from dual financing by insurances (operating costs) and state (capital costs) to a single financing source. The new capital costing scheme will intensify the discussion on how to solve the current investment backlog in Germany and can assist regulators in other countries with the introduction of accurate capital costing.

Cost and technical efficiency of physician practices: a stochastic frontier approach using panel data

This is the first study to use stochastic frontier analysis to estimate both the technical and cost efficiency of physician practices. The analysis is based on panel data from 3,126 physician practices for the years 2006 through 2008. We specified the technical and cost frontiers as translog function, using the one-step approach of Battese and Coelli to detect factors that influence the efficiency of general practitioners and specialists. Variables that were not analyzed previously in this context (e.g., the degree of practice specialization) and a range of control variables such as a patients' case-mix were included in the estimation. Our results suggest that it is important to investigate both technical and cost efficiency, as results may depend on the type of efficiency analyzed. For example, the technical efficiency of group practices was significantly higher than that of solo practices, whereas the results for cost efficiency differed. This may be due to indivisibilities in expensive technical equipment, which can lead to different types of health care services being provided by different practice types (i.e., with group practices using more expensive inputs, leading to higher costs per case despite these practices being technically more efficient). Other practice characteristics such as participation in disease management programs show the same impact throughout both cost and technical efficiency: participation in disease management programs led to an increase in both, technical and cost efficiency, and may also have had positive effects on the quality of care. Future studies should take quality-related issues into account.

Epidemiology and cost of herpes zoster and postherpetic neuralgia in Germany

After acquiring a varicella virus infection, the virus can reactivate and cause herpes zoster (HZ)--a painful skin rash. A complication of HZ is long-term persistence of pain after the rash has resolved (so-called postherpetic neuralgia, PHN). We aimed to describe the epidemiology of HZ/PHN and to estimate HZ/PHN-related costs in the German statutory health insurance (SHI) system (~85% of the total population). Treatment data of one large SHI was utilized, containing data on approximately 240,000 insured and their utilisation of services in 2004-2009. Identification of HZ- and PHN-cases was performed based on 'International Statistical Classification of Diseases' and specific medications using a control-group design. Incidences per 1,000 person-years (PY) and cost-of-illness for 1 year following HZ-onset considering the payer and societal perspective were calculated. All amounts were inflated to 2010 Euros. Population-figures were standardised and extrapolated to the total SHI-population in Germany in 2010. A mean annual incidence of 5.79 HZ-cases per 1,000 PY was observed, translating into an estimated 403,625 HZ-cases per year in the total SHI-population. Approximately 5% of HZ-cases developed PHN. One HZ-case caused on average euro 210 and euro 376 of costs from the payer and societal perspective, respectively. The development of PHN generated additional costs of euro 1,123 (euro 1,645 societal perspective). Total annual HZ/PHN-related costs were estimated at euro 182 million (euro 105 million) to society (payer). HZ and PHN place a considerable burden on the German SHI-system. Since HZ-vaccines will soon be available, a health-economic evaluation of these vaccines should be conducted.

Diagnosis-related groups for stroke in Europe: patient classification and hospital reimbursement in 11 countries

BACKGROUND

Diagnosis-related groups (DRGs) are increasingly being used for various purposes in many countries. However, there are no studies comparing different DRG systems in the care of stroke. As part of the EuroDRG project, researchers from 11 countries (i.e. Austria, England, Estonia, Finland, France, Germany, Ireland, the Netherlands, Poland, Sweden and Spain) compared how their DRG systems deal with stroke patients. The study aims to assist clinicians and national authorities to optimize their DRG systems.

METHODS

National or regional databases were used to identify hospital cases with a diagnosis of stroke. DRG classification algorithms and indicators of resource consumption were compared for those DRGs that individually represent at least 1% of stroke cases. In addition, standardized case vignettes were defined, and quasi prices according to national DRG-based hospital payment systems were ascertained.

RESULTS

European DRG systems vary widely: they classify stroke patients according to different sets of variables (between 1 and 7 classification variables) into diverging numbers of DRGs (between 1 and 10 DRGs). In 6 of the countries more than half of the patients are concentrated within a single DRG. The countries' systems also vary with respect to the evaluation of different kinds of stroke patients. The most complex DRG is considered 3.8 times more resource intensive than an index case in Finland. By contrast, in England, the DRG system does not account for complex cases. Comparisons of quasi prices for the case vignettes show that hypothetical payments for the index case amount to only EUR 907 in Poland but to EUR 7,881 in Ireland.

CONCLUSIONS

Large variations in the classification of stroke patients raise concerns whether all systems rely on the most appropriate classification variables and whether the DRGs adequately reflect differences in the complexity of treating different groups of patients. Learning from other DRG systems may help in improving the national systems. Clinicians and national DRG authorities should consider how other countries' DRG systems classify stroke patients in order to optimize their DRG system and to ensure fair and appropriate reimbursement. In future, quantitative research is needed to verify whether the most important determinants of cost are considered in different patient classification systems, and whether differences between systems reflect country-specific differences in treatment patterns and, most importantly, what influence they have on patient outcomes.

Changes in hospital efficiency after privatization

We investigated the effects of privatization on hospital efficiency in Germany. To do so, we obtained boot-strapped data envelopment analysis (DEA) efficiency scores in the first stage of our analysis and subsequently employed a difference-in-difference matching approach within a panel regression framework. Our findings show that conversions from public to private for-profit status were associated with an increase in efficiency of between 2.9 and 4.9%. We defined four alternative post-privatization periods and found that the increase in efficiency after a conversion to private for-profit status appeared to be permanent. We also observed an increase in efficiency for the first three years after hospitals were converted to private non-profit status, but our estimations suggest that this effect was rather transitory. Our findings also show that the efficiency gains after a conversion to private for-profit status were achieved through substantial decreases in staffing ratios in all analyzed staff categories with the exception of physicians and administrative staff. It was also striking that the efficiency gains of hospitals converted to for-profit status were significantly lower in the diagnosis-related groups (DRG) era than in the pre-DRG era. Altogether, our results suggest that converting hospitals to private for-profit status may be an effective way to ensure the scarce resources in the hospital sector are used more efficiently.

Introduction of DRG-based reimbursement in inpatient psychosomatics--an examination of cost homogeneity and cost predictors in the treatment of patients with eating disorders

OBJECTIVE

Various western countries are focusing on the introduction of reimbursement based on diagnosis-related groups (DRG) in inpatient mental health. The aim of this study was to analyze if psychosomatic inpatients treated for eating disorders could be reimbursed by a common per diem rate.

METHODS

Inclusion criteria for patient selection (n=256) were (1) a main diagnosis of anorexia nervosa (AN), bulimia nervosa (BN) or eating disorder-related obesity (OB), (2) minimum length of hospital stay of 2 days, (3) and treatment at Charité Universitaetsmedizin Berlin, Germany during the years 2006-2009. Cost calculation was executed from the hospital's perspective, mainly using micro-costing. Generalized linear models with Gamma error distribution and log link function were estimated with per diem costs as dependent variable, clinical and patient variables as well as treatment year as independent variables.

RESULTS

Mean costs/case for AN amounted to 5,251€, 95% CI [4407-6095], for BN to 3,265€, 95% CI [2921-3610] and for OB to 3,722€, 95% CI [4407-6095]. Mean costs/day over all patients amounted to 208€, 95% CI [198-218]. The diagnosis AN predicted higher costs in comparison to OB (p=.0009). A co-morbid personality disorder (p=.0442), every one-unit increase in BMI in OB patients (p=.0256), every one-unit decrease in BMI in AN patients (p=.0002) and every additional life year in BN patients (p=.0455) predicted increased costs.

CONCLUSION

We see a need for refinements to take into account considerable variations in treatment costs between patients with eating disorders due to diagnosis, BMI, co-morbid personality disorder and age.

Improving patient-level costing in the English and the German 'DRG' system

OBJECTIVES

The purpose of this paper is to develop ways to improve patient-level cost apportioning (PLCA) in the English and German inpatient 'DRG' cost accounting systems, to support regulators in improving costing schemes, and to give clinicians and hospital management sophisticated tools to measure and link their management.

METHODS

The paper analyzes and evaluates the PLCA step in the cost accounting schemes of both countries according to the impact on the key aspects of DRG introduction: transparency and efficiency. The goal is to generate a best available PLCA standard with enhanced accuracy and managerial relevance, the main requirements of cost accounting.

RESULTS

A best available PLCA standard in 'DRG' cost accounting uses: (1) the cost-matrix from the German system; (2) a third axis in this matrix, representing service-lines or clinical pathways; (3) a scoring system for key cost drivers with the long-term objective of time-driven activity-based costing and (4) a point of delivery separation.

CONCLUSION

Both systems have elements that the other system can learn from. By combining their strengths, regulators are supported in enhancing PLCA systems, improving the accuracy of national reimbursement and the managerial relevance of inpatient cost accounting systems, in order to reduce costs in health care.

Reforming reimbursement of public hospitals in Greece during the economic crisis: Implementation of a DRG system

OBJECTIVES

Until recently, in-patient NHS hospital care in Greece was reimbursed via an anachronistic and under-priced retrospective per diem system, which has been held primarily responsible for continuous budget deficits. The purpose of this paper is to present the efforts of the Ministry of Health (MoH) to implement a new DRG-based payment system.

METHODS

As in many countries, the decision was to adopt a patient classification from abroad and to refine it for use in Greece with national data. Pricing was achieved with a combination of activity-based costing with data from selected Greek hospitals, and "imported" cost weights. Data collection, IT support and monitoring are provided via ESY.net, a web-based facility developed and implemented by the MoH.

RESULTS

After an initial pilot testing of the classification in 20 hospitals, complete DRG reimbursement data was reported by 113 hospitals (85% of total) for the fourth quarter of 2011. The recorded monthly increase in patient discharges billed with the new system and in revenue implies increasing adaptability by the hospitals. However, the unfavorable inlier vs. outlier distribution of discharges and revenue observed in some health regions signifies the need for corrective actions.

CONCLUSIONS

The importance of this reimbursement reform is discussed in light of the current crisis faced by the Greek economy. There is yet much to be done and many projects are currently in progress to support this effort; however the first cost containment results are encouraging.

Cost of illness of cystic fibrosis in Germany: results from a large cystic fibrosis centre

BACKGROUND

Cystic fibrosis (CF) is the most common life-shortening genetic disorder among Whites worldwide. Because many of these patients experience chronic endobronchial colonization and have to take antibiotics and be treated as inpatients, societal costs of CF may be high. As the disease severity varies considerably among patients, costs may differ between patients.

OBJECTIVES

Our objectives were to calculate the average total costs of CF per patient and per year from a societal perspective; to include all direct medical and non-medical costs as well as indirect costs; to identify the main cost drivers; to investigate whether patients with CF can be grouped into homogenous cost groups; and to determine the influence of specific factors on different cost categories.

METHODS

Resource utilization data were collected for 87 patients admitted to an inpatient unit at a CF treatment centre during the first 6 months of 2004 and 125 patients who visited the centre's CF outpatient unit during the entire year. Fifty-four patients were admitted to the hospital and also visited the outpatient unit. Since all patients were exclusively treated at the centre, data could be aggregated. Costs that varied greatly between patients were measured per patient. The remaining costs were summarized as overhead costs and allocated on the basis of days of treatment or contacts per patient. Costs of the outpatient and inpatient units and costs for drugs patients received at the outpatient pharmacy were summarized as direct medical costs. Direct non-medical costs (i.e. travel expenses), as well as indirect costs (i. e. absence from work, productivity losses), were also included in the analysis. Main cost drivers were detected by the analysis of different cost categories. Patients were classified according to a diagnosis-related severity model, and median comparison tests (Wilcoxon-Mann-Whitney tests) were performed to investigate differences between the severity groups. Generalized least squares (GLS) regressions were used to identify variables influencing different cost categories. A sensitivity analysis using Monte Carlo simulation was performed.

RESULTS

The mean total cost per patient per year was &U20AC;41 468 (year 2004 values). Direct medical costs accounted for more than 90% of total costs and averaged &U20AC;38 869 (&U20AC;3876 to &U20AC;88 096), whereas direct non-medical costs were minimal. Indirect costs amounted to &U20AC;2491 (6% of total costs). Costs for drugs patients received at the outpatient pharmacy were the main cost driver. Costs rose with the degree of severity. Patients with moderate and severe disease had significantly higher direct costs than the relatively milder group. Regression analysis revealed that direct costs were mainly affected by the diagnosis-related severity level and the expiratory volume; the coefficient indicating the relationship between costs for mild CF patients and other patients rose with the degree of severity. A similar result was obtained for drug costs per patient as the dependent variable. Monte Carlo simulation suggests that there is a 90% probability that annual costs will be lower than &U20AC;37 300.

CONCLUSIONS

The share of indirect costs as a percentage of total costs for CF was rather low in this study. However, the relevance of indirect costs is likely to increase in the future as the life expectancy of CF patients increases, which is likely to lead to a rising work disability rate and thus increase indirect costs. Moreover we found that infection with Pseudomonas aeruginosa increases costs substantially. Thus, a decrease of the prevalence of P. aeruginosa would lead to substantial savings for society.

Assessing DRG cost accounting with respect to resource allocation and tariff calculation: the case of Germany

The purpose of this paper is to analyze the German diagnosis related groups (G-DRG) cost accounting scheme by assessing its resource allocation at hospital level and its tariff calculation at national level. First, the paper reviews and assesses the three steps in the G-DRG resource allocation scheme at hospital level: (1) the groundwork; (2) cost-center accounting; and (3) patient-level costing. Second, the paper reviews and assesses the three steps in G-DRG national tariff calculation: (1) plausibility checks; (2) inlier calculation; and (3) the "one hospital" approach. The assessment is based on the two main goals of G-DRG introduction: improving transparency and efficiency. A further empirical assessment attests high costing quality. The G-DRG cost accounting scheme shows high system quality in resource allocation at hospital level, with limitations concerning a managerially relevant full cost approach and limitations in terms of advanced activity-based costing at patient-level. However, the scheme has serious flaws in national tariff calculation: inlier calculation is normative, and the "one hospital" model causes cost bias, adjustment and representativeness issues. The G-DRG system was designed for reimbursement calculation, but developed to a standard with strategic management implications, generalized by the idea of adapting a hospital's cost structures to DRG revenues. This combination causes problems in actual hospital financing, although resource allocation is advanced at hospital level.

Setting health insurance remuneration rates of private providers in Kenya: the role of costing, challenges and implications

Successful health financing depends on prudent design of resource collection, pooling and purchasing. One of the critical purchasing design issues is the provider payment mechanism and the remuneration rates, which need to set appropriate incentives to health providers. In order to set remuneration rates, cost information is required, but this is not known in many developing countries. This paper illuminates the role of costing and the challenges of resetting health insurance remuneration rates for private hospitals in Kenya and discusses the implications and lessons. The results and proceedings of costing studies from Kenya are reviewed, which reveals methodological and practical challenges as to revising remuneration rates. The costing results are characterized by high variability, which is, among other factors, due to suboptimal resource use at some hospitals and provider payment mechanisms that incentivise over-provision. In such a context, hospital-specific remuneration rates are advisable. In conclusion, remuneration rate setting is not just about translating costing results into a price tag, but other factors have to be considered in a low-income country context in order to balance out health sector objectives and provider interests. Inclusion of providers in developing the costing methodology proves important to increase acceptability of results.

A multi-perspective cost-effectiveness analysis comparing rivaroxaban with enoxaparin sodium for thromboprophylaxis after total hip and knee replacement in the German healthcare setting

BACKGROUND

Patients undergoing major orthopaedic surgery (MOS), such as total hip (THR) or total knee replacement (TKR), are at high risk of developing venous thromboembolism (VTE). For thromboembolism prophylaxis, the oral anticoagulant rivaroxaban has recently been included in the German diagnosis related group (DRG) system. However, the cost-effectiveness of rivaroxaban is still unclear from both the German statutory health insurance (SHI) and the German hospital perspective.

OBJECTIVES

To assess the cost-effectiveness of rivaroxaban from the German statutory health insurance (SHI) perspective and to analyse financial incentives from the German hospital perspective.

METHODS

Based on data from the RECORD trials and German cost data, a decision tree was built. The model was run for two settings (THR and TKR) and two perspectives (SHI and hospital) per setting.

RESULTS

Prophylaxis with rivaroxaban reduces VTE events (0.02 events per person treated after TKR; 0.007 after THR) compared with enoxaparin. From the SHI perspective, prophylaxis with rivaroxaban after TKR is cost saving (€27.3 saving per patient treated). However, the cost-effectiveness after THR (€17.8 cost per person) remains unclear because of stochastic uncertainty. From the hospital perspective, for given DRGs, the hospital profit will decrease through the use of rivaroxaban by €20.6 (TKR) and €31.8 (THR) per case respectively.

CONCLUSIONS

Based on our findings, including rivaroxaban for reimbursement in the German DRG system seems reasonable. Yet, adequate incentives for German hospitals to use rivaroxaban are still lacking.

Paying for hospital care: the experience with implementing activity-based funding in five European countries

Following the US experience, activity-based funding has become the most common mechanism for reimbursing hospitals in Europe. Focusing on five European countries (England, Finland, France, Germany and Ireland), this paper reviews the motivation for introducing activity-based funding, together with the empirical evidence available to assess the impact of implementation. Despite differences in the prevailing approaches to reimbursement, the five countries shared several common objectives, albeit with different emphasis, in moving to activity-based funding during the 1990s and 2000s. These include increasing efficiency, improving quality of care and enhancing transparency. There is substantial cross-country variation in how activity-based funding has been implemented and developed. In Finland and Ireland, for instance, activity-based funding is principally used to determine hospital budgets, whereas the models adopted in the other three countries are more similar to the US approach. Assessing the impact of activity-based funding is complicated by a shortage of rigorous empirical evaluations. What evidence is currently available, though, suggests that the introduction of activity-based funding has been associated with an increase in activity, a decline in length of stay and/or a reduction in the rate of growth in hospital expenditure in most of the countries under consideration.

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

Background

As part of the EuroDRG project, researchers from 11 countries (i.e., Austria, England, Estonia, Finland, France, Germany, Ireland, Netherlands, Poland, Sweden, and Spain) compared how their diagnosis-related groups (DRG) systems deal with appendectomy patients. The study aims to assist surgeons and national authorities to optimize their DRG systems.

Methods

National or regional databases were used to identify hospital cases with a diagnosis of appendicitis treated with a procedure of appendectomy. DRG classification algorithms and indicators of resource consumption were compared for those DRGs that together comprised at least 97% of cases. Six standardized case vignettes were defined, and quasi prices according to national DRG-based hospital payment systems were ascertained.

Results

European DRG systems vary widely: they classify appendectomy patients according to different sets of variables (between two and six classification variables) into diverging numbers of DRGs (between two and 11 DRGs). The most complex DRG is valued 5.1 times more resource intensive than an index case in France but only 1.1 times more resource intensive than an index case in Finland. Comparisons of quasi prices for the case vignettes show that hypothetical payments for the most complex case vignette amount to only 1,005€ in Poland but to 12,304€ in France.

Conclusions

Large variations in the classification of appendectomy patients raise concerns whether all systems rely on the most appropriate classification variables. Surgeons and national DRG authorities should consider how other countries’ DRG systems classify appendectomy patients in order to optimize their DRG system and to ensure fair and appropriate reimbursement.

Electronic supplementary material

The online version of this article (doi:10.1007/s00423-011-0877-5) contains supplementary material, which is available to authorized users.

Hospital ownership and efficiency: a review of studies with particular focus on Germany

The German hospital market has been subject over the past two decades to a variety of healthcare reforms. Particularly the introduction of diagnosis-related groups (DRGs) in 2004 aimed to increase efficiency of hospitals. The objective of the paper is to review recent studies comparing the efficiency of German public, private non-profit and private for-profit hospitals. The results of the studies are quite mixed. However, in line with the evidence found in studies from other countries, especially the US, the evidence from Germany suggests that private ownership (i.e., private non-profit and private for-profit) is not necessarily associated with higher efficiency compared to public ownership. This may be a surprising result to many policy makers as private for-profit hospitals are often perceived the most efficient ownership type by the public.

Assessing health care planning--a framework-led comparison of Germany and New Zealand

OBJECTIVES

With markets and competition dominating much of the debate on health care reform, health care planning has received little scholarly attention in recent years. Yet in many high-income countries, governments have continued to plan some elements of their health care systems. We use a new framework for analysing health care planning organised around the dimensions of 'vision', 'governance' and 'intelligence' to assess the approach in two deliberately contrasting countries, Germany and New Zealand.

METHODS

A review of the literature on health care planning in general and specifically in Germany and New Zealand, supported by key participant interviews.

RESULTS

Planning in both countries largely reflects the different institutional arrangements of their wider health systems. Planning in Germany is fragmented, in part due to federalism and corporatism, with separate approaches in different health care sectors and regions. In contrast, New Zealand's NHS-style health system favours a more hierarchical, integrated approach, with clear lines of accountability, and central government capacity to define objectives and monitor developments. Both countries find it difficult to use planning to align demand for and supply of health care though New Zealand makes some use of population needs assessments to support this process while these are currently absent in Germany.

CONCLUSIONS

While it remains challenging to compare health care systems that are institutionally very different, this new framework for analysing their approaches to planning draws attention to their advantages and disadvantages. It also generates an agenda for future research to improve our understanding of the role and effectiveness of different forms of planning versus, and in combination with, other policy tools to relating health care supply and demand.

Assessment of psychiatric outcomes in Japan based on diagnostic procedure combination information

We evaluated psychiatric care in terms of relationships between patient characteristics and a comprehensive measurement of psychiatric outcomes among inpatients with lengths of stay (LOSs) of 90 days or fewer in a psychiatric hospital in Japan. The sample consisted of inpatients discharged from an acute care psychiatric hospital between September 1 and December 31, 2007. Multivariate analyses were performed to identify patient characteristics related to the outcome of acute psychiatric care. The type of admission was related to difference in Global Assessment of Functioning (GAF) scores (P < 0.001), health care cost (P < 0.001), length of time spent in seclusion (P < 0.001), and length of time spent in restraints (P < 0.01). Diagnosis showed a minimal or non-existent relationship to the outcome variables. The GAF scores of involuntary patients with initially low scores on this axis were greatly improved at discharge. Patients who were admitted involuntarily received more coercive interventions and treatments, such as seclusion and restraints, than did patients with who were admitted voluntarily. Diagnostic groups did not differ in terms of GAF scores. Further studies utilizing diagnostic procedure combination (DPC) data from multiple medical institutions are necessary to verify the present findings.

Adverse drug reactions in Germany: direct costs of internal medicine hospitalizations

PURPOSE

German hospital reimbursement modalities changed as a result of the introduction of Diagnosis Related Groups (DRG) in 2004. Therefore, no data on the direct costs of adverse drug reactions (ADRs) resulting in admissions to departments of internal medicine are available. The objective was to quantify the ADR-related economic burden (direct costs) of hospitalizations in internal medicine wards in Germany.

METHODS

Record-based study analyzing the patient records of about 57,000 hospitalizations between 2006 and 2007 of the Net of Regional Pharmacovigilance Centers (Germany). All ADRs were evaluated by a team of experts in pharmacovigilance for severity, causality, and preventability. The calculation of accurate person-related costs for ADRs relied on the German DRG system (G-DRG 2009). Descriptive and bootstrap statistical methods were applied for data analysis.

RESULTS

The incidence of hospitalization due to at least 'possible' serious outpatient ADRs was estimated to be approximately 3.25%. Mean age of the 1834 patients was 71.0 years (SD 14.7). Most frequent ADRs were gastrointestinal hemorrhage (n = 336) and drug-induced hypoglycemia (n = 270). Average inpatient length-of-stay was 9.3 days (SD 7.1). Average treatment costs of a single ADR were estimated to be approximately €2250. The total costs sum to €434 million per year for Germany. Considering the proportion of preventable cases (20.1%), this equals a saving potential of €87 million per year.

CONCLUSIONS

Preventing ADRs is advisable in order to realize significant nationwide savings potential. Our cost estimates provide a reliable benchmark as they were calculated based on an intensified ADR surveillance and an accurate person-related cost application.

Costs and quality of hospitals in different health care systems: a multi-level approach with propensity score matching

Cross-country comparisons of costs and quality between hospitals are often made at the macro level. The goal of this study was to explore methods to compare micro-level data from hospitals in different health care systems. To do so, we developed a multi-level framework in combination with a propensity score matching technique using similarly structured data for patients receiving treatment for acute myocardial infarction in German and US Veterans Health Administration hospitals. Our case study shows important differences in results between multi-level regressions based on matched and unmatched samples. We conclude that propensity score matching techniques are an appropriate way to deal with the usual baseline imbalances across the samples from different countries. Multi-level models are recommendable to consider the clustered structure of the data when patient-level data from different hospitals and health care systems are compared. The results provide an important justification for exploring new ways in performing health system comparisons.