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Hospital Healthcare Europe

HOPE undertakes a study of diagnosis-related groups

Pascal Garel
1 July, 2006  

Pascal Garel
Secretary General
HOPE
Brussels, Belgium
E: sg@hope.be

A report received from HOPE Central Office

Financing is not a new issue for HOPE. Ever since its foundation in 1966, when the hospital federations of the six Member States of the European Community decided to compare each other’s systems, HOPE has maintained an interest in the field. Since then, HOPE has published several comparative documents related to financing: Cost of Health Care Provisions (1976), Methods of Cost Containment in Hospitals (1978), Cost Containment and Clinical Budgeting in Europe (1988), Trends in Hospital Financing in the EU (1997) and Health as a Growth Factor: A Comparative Analysis (2003).

Comparative information on healthcare systems has certainly improved in the last 15 years. Organisations such as the Organisation of Economic Cooperation and Development, the World Health Organization and more recently the European Commission, are producing comparable information. In addition, academic research has looked to analyse healthcare financing, with numerous studies having been published or in the process of being published.

Diagnosis-related groups
Yet, there are still holes in this field of knowledge that HOPE is trying to fill. One of these is the use of diagnosis-related groups (DRGs) and, more precisely, their financial use. This concept, which was created and first used in the US, has been introduced in EU Member States during the last 20 years. As their importance is growing, HOPE has seen an opportunity to undertake the first comprehensive study, which will be regularly updated.

Study aims
The goal of the study was to fully understand and describe the present use of the DRG system in financing hospitals in EU Member States. In particular, the study aimed to clarify the original reasons that necessitated the introduction of the DRG system. To do this, the study looked at: the way healthcare systems are organised; differences from country to country and within countries regarding the way they use this new tool; the implementation process; and any obstacles that had occurred.

A questionnaire was sent out to all EU countries, and the results demonstrated the obvious diversity of individual nations. This will not be a surprise to those who know how diverse European healthcare systems are and how deeply rooted they are in national culture and history. Determinants of diversity can of course be found in the classical tax-based versus insurance system distinction, but it is worth emphasising the importance of decentralisation to European healthcare systems. Decentralisation varies in content (eg, financing, organisation and delivery), but it is particularly important to the way in which DRGs were implemented and are used today.

Results of the study
The study shows that usage of DRGs throughout Europe is complex: some countries use DRGs, but not for a direct financial purpose; some countries are using DRGs for a very limited financial purpose, such as the transfer of patients within the country; and there are still countries who are not using DRGs at all.

The decentralisation of healthcare in, for example, Finland and Sweden has led to individual local authorities (counties in Sweden and municipalities in Finland) using DRGs for different goals. This adds to the complexity of the picture, and one has to be careful when analysing how a particular country is using DRGs as a financial tool, since this might differ in the context of how it is used both geographically and quantitatively. Even in Nordic countries, where the so-called “Nord DRGs” are used, there are major differences. Here, differences result from the various levels of investment in resources to develop DRGs and the political will behind it.

Overall, it is clear that the differences are increasing, making communication between systems more difficult. This is particularly true for procedures.

Important issues arising from the study
There is, however, one common denominator – the role of DRGs, even when they are implemented as a prospective financing system, is not limited to financing. It becomes clear when analysing the results of the study that, in general, the first goal when implementing a DRG system is transparency, followed by their use as an effective financial tool. In terms of transparency, the result is quite positive as there is indeed an increase of transparency – even when DRGs are not used as a direct financial tool. Nevertheless, it is too early to know the real influence on the organisation and production of healthcare.

One major outcome of the study is the proof that there are no links between DRGs and quality of care indicators. There is also no clear causality relationship between the implementation of DRGs and a reduction in waiting lists. DRGs and waiting lists are not always linked. However, some countries are using DRGs to reduce their waiting lists or at least try to avoid risk of selection. However, as many other mechanisms have been used to reduce hospital waiting lists, it is not possible to explain it solely by the introduction of DRGs.

Another major finding of the study is that national and regional adjustments are key to the success of DRG implementation. Regardless of its feasibility, it is also obvious that a common European system does not seem necessary; there is enough to work on nationally.

What is clear, finally, is that DRGs are here to stay, not necessarily for reimbursement but certainly as part of the case mix. The study is available on www.hope.be