How do DRG-funding affect quality

How does DRG-funding affect quality seen from the patient’s perspective
Anni Ankjær-Jensen
Danish Rheumatism Association
Nordic Casemix Conference
Helsinki June 3, 2010
About the Danish Rheumatism
A private patient organisation
Indepedent from commercial and political
74.000 members
500 volunteers working for the cause nationwide
A major contributor to research in rheumatology
in Denmark (11 mio. in 2009)
Will try to answer the following
How is quality defined viewed from the patient
How could DRG-payment conflict with quality?
What is the evidence?
How should hospitals be financed in order to
support quality?
Quality of care –viewed from the
patient perspective
The best clinical quality of the entire treatment
Timely admission to care, efficient treatment
episodes, and diagnostic evaluations with no
unnecessary waiting time
Integrated and coordinated care
Information, communication, education and
participation – patients and relatives
Respectfull treatment by the staff
Equal access
DRG-funding implies:
The hospital/department budget depends on the
number of patients treated
The hospital is payed a fixed price per patient
irrespective of the actual treatment cost
This could give the hospitals an incentive to react in the following way:
•More patients treated
•Less time for
•Shorter waiting lists
•Shorter and more efficient
inpatient stays
•Complications avoided
•Unnecessary tests/examinations avoided
•Patients discharged are
more sick
• Fail necessary
test/examinations (scipping)
DRG-payment may also lead to:
Cream scimming
Negative effect on equity
Suboptimising (”kassetænkning”)
Negative effect on coordination/integration
DRG-payment also implies:
Production is rewarded- not other dimensions of
hospital activity, such as quality
Less attention on other dimensions
Number of treated patients are rewarded - not
other outputs from the hospital such as
prevention, coorporation with the primary sector
and education of young doctors
Less attention on other outputs
Summary- expected consequences
for patient experienced quality of
Quality measure
The best clinical quality
Timely admission and efficient
treatment/diagnostic episodes
Integrated/coordinated care
Respectfull treatment by the staff
Equal access
Experiences from the USA
In 1983 Health Care Financing Administration
changed the way hospitals were reimbursed for
medicare and medicaidpatients
Study of the proces of care before and after
introduction of the DRG-based prospective
payment (Kahn et. al. Jama 1990:264)
Included 14,012 patients hospitalized before and
after implementation of PPS
Process of care improved after introduction of PPS
Increased likelihood that the patient will be
discharged from the hospital in an unstable
Experiences from Norway
”Stykprisforsøget” 1991-1994
2 studies of the effect on quality (Petterson1995):
No change in hospital incurred infections
No change in the treatment of patient with AMI
”Indsatstyret finansiering” 1997 –
Report from the public auditor (Oslo 2002):
No negative effects on quality in the form of
unnecessary admissions, stability when
discharged, reduction in intensity of treatment,
readmission, mortality, and patient satisfaction
Experiences from Sweeden
”Beställer utfører” programs in a number of
counties 1990 –
”The Stockholm model”
Interview with physicians employed at clinics with
DRG (Svenson, Garelius 1994)
30% said that the quality had deteriorated
Interview with physicians employed at clinics with
DRG, and physicians in clinics without DRG
(Forsberg m.fl. 2000)
More phycisians at DRG hospitals find that
quality has deteriorated
Experiences from Sweeden (2)
Gävleborg County
Quality of care before and after the introduction af
DRG, reported by patients (Ljungreen og Sjoden
2001, 2003)
A decreased satisfaction with the possibility to ask
questions,treatment by staff at the ward on arrival
and when discharged
No change in quality of life after discharge
Experiences from Denmark
”Takststyring” 2004Evaluation. Interview with physicians (AnkjærJensen 2005)
No negative effects on quality (”we will not
compromise on quality”)
Exampels of suboptimising, lack of cooporation
between different clinics, who will take the overall
responsibility for the patient?
Exampels of physicians prioritizing patients who
are expected to use their right to free choice of
hospital at the expence of patients who are not
expected to use their right to free choice of
Summary on evidence
Quality measure
Timely acces, efficient treatment
Integrated/coordinated care
The best clinical quality
Respectful treatment by the staff
Equal acces
Pay for performance in the USA
50 % of all managed care organisations in the
USA have implemented P4P programs
Hospitals are rewarded if they reach certain
predefined quality indicators
Ex: Number of patients admitted with AMI, that:
Ordinated aspirin at admission and when
Are advised on smoking cessation
Die at the hospital
Timely acces to care
Doctor patient communication
Patient satisfaction
Adverse effects of P4P
Quality indicators are based on available
evidence/ can be measured
Areas/patient groups where no indicators have
been deveolped or where little research is being
done may be overlooked
Are phycisians motivated by
What motivates physicians and nurses?
Recognition/rewards from colleagues
Implementation of new treatments
Treatment of many patients
Money, however not money itsef, but to be able to
implement new treatments/ to educate and be
Financial incentives only work on rewarded items
Risk of less attention on other aspects of the
hospital activity
If you want to improve/secure quality, you can
not rely on financial incentives. Instead you
should focus on
Feed back systems
Thank you for your attention