DRG systems in Europe
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......................................................................................................... European Journal of Public Health, Vol. 24, No. 6, 1023–1028 ß The Author 2014. Published by Oxford University Press on behalf of the European Public Health Association. All rights reserved. doi:10.1093/eurpub/cku025 Advance Access published on 13 March 2014
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DRG systems in Europe: variations in cost accounting systems among 12 countries Siok Swan Tan1, Alexander Geissler2, Lisbeth Serde´n3, Mona Heurgren3, B. Martin van Ineveld1, W. Ken Redekop1, Leona Hakkaart-van Roijen1, on behalf of the EuroDRG group4 1 2 3 4
Institute for Medical Technology Assessment, Erasmus Universiteit Rotterdam, Rotterdam, the Netherlands Department of Health Care Management, Berlin University of Technology, Berlin, Germany National Board of Health and Welfare, Stockholm, Sweden http://www.eurodrg.eu/EuroDRG_Group.pdf
Correspondence: Siok Swan Tan, Erasmus Universiteit Rotterdam, Institute for Medical Technology Assessment, P.O. Box 1738, 3000 DR Rotterdam, Netherlands, Tel: +31-10-4088623, Fax: +31-10-4089081, e-mail: [email protected]
Background: Diagnosis-related group (DRG)-based hospital payment systems have gradually become the principal means of reimbursing hospitals in many European countries. Owing to the absence or inaccuracy of costs related to DRGs, these countries have started to routinely collect cost accounting data. The aim of the present article was to compare the cost accounting systems of 12 European countries. Methods: A standardized questionnaire was developed to guide comprehensive cost accounting system descriptions for each of the 12 participating countries. Results: The cost accounting systems of European countries vary widely by the share of hospital costs reimbursed through DRG payment, the presence of mandatory cost accounting and/or costing guidelines, the share of cost collecting hospitals, costing methods and data checks on reported cost data. Each of these aspects entails a tradeoff between accuracy of the cost data and feasibility constraints. Conclusion: Although a ‘best’ cost accounting system does not exist, our cross-country comparison gives insight into international differences and may help regulatory authorities and hospital managers to identify and improve areas of weakness in their cost accounting systems. Moreover, it may help health policymakers to underpin the development of a cost accounting system.
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Introduction Diagnosis-related group systems With the objective of improving the efficiency of hospital service delivery, diagnosis-related group (DRG) systems have gradually become the principal means of reimbursing hospitals in many European countries.1 The basic idea of DRG systems is that patients are classified into a limited number of DRGs, which are supposed to be clinically meaningful and relatively homogenous in their resource consumption patterns.2 Although each country implemented its own unique DRG system, the Health Care Financing Administration system introduced in 1983 in the USA commonly served as a basis for the DRG systems used in European countries.3 However, some countries such as Austria and the Netherlands have developed their own DRG system.
Cost accounting In health care, cost accounting predominantly aims to support managerial decisions and to monitor and control the resource consumption with respect to hospital service delivery.4 Cost accounting data are used to develop and update DRG systems and are necessary to calculate DRG prices for the reimbursement of hospitals. Owing to the absence or inaccuracy of costs related to DRGs, many European countries have started to routinely collect cost accounting data.5,6 After all, hospitals are likely to be over- or underpaid for specific DRGs if cost data are inaccurate. Although profitable DRGs may, in practice, compensate for less profitable DRGs, hospitals are disincentivized to improve efficiency for certain groups of patients if cost accounting leads to overestimated payments for a specific DRG. On the other hand, hospitals are disincentivized to provide unprofitable high-quality care if cost accounting leads to underestimated payments for a specific DRG.
The introduction of DRGs throughout Europe has stimulated the comparison of DRG systems and their performance. For example, many studies have tried to explain the wide cost variations by DRG.7–11 These studies considered the patient casemix, medical practice patterns (e.g. presence of innovative procedures), financial incentives and relative and absolute prices between countries to be potential factors influencing cost differences. However, many of the observed cost differences relate to differences in some aspects of cost accounting systems.
Cost accounting systems Cost accounting systems provide mechanisms to identify the sources of costs related to DRGs, which allows for validating cost homogeneities, adjusting DRG weights and detecting cost outliers.6 Aspects of cost accounting systems comprise: (i) the share of hospital costs reimbursed through DRG payment, (ii) the presence of mandatory cost accounting and/or costing guidelines, (iii) the share of cost collecting hospitals, (iv) costing methods and (v) data checks on reported cost data. Although some studies have compared aspects of cost accounting systems,8,12,13 they did not specifically focus on costing methods, included a limited number of countries and/or were conducted at the individual DRG level. As part of the EuroDRGproject, detailed descriptions are provided of the contextual factors that led to the cost accounting systems implemented in 12 European countries, namely, Austria, England, Estonia, Finland, France, Germany, Ireland, the Netherlands, Poland, Portugal, Spain/Catalonia and Sweden.14 The specific aim of the present article is to compare the cost accounting systems of these 12 European countries at the whole system level. Although a ‘best’ cost accounting system does not exist, our cross-country comparison gives insight into
European Journal of Public Health
Results The share of hospital costs reimbursed through DRG-based payment Table 1 shows that DRG-based payment is the principal means of reimbursing hospitals in the majority of countries. However, DRGbased payment accounted for just 15–20% of the total revenues in Spain/Catalonia and 39% in Estonia. Furthermore, each country Identifying hospital services Accuracy
-
+
-
The hospital cost accounting systems of 12 European countries were compared at the whole system level. The 12 countries were selected based on their geographical region, health system typology and their duration of affiliation to the European Union, to ensure a comparison of countries with truly different characteristics. A standardized questionnaire was developed to guide comprehensive DRG system descriptions for each of the 12 participating countries. The development process has been described in detail elsewhere.15 In short, laws, regulations and scientific and grey literature for each country were reviewed, summarized in overview tables and verified by national researchers. All analyses were based on 2008 data. One section of the questionnaire focused specifically on how each country’s DRG system deals with cost accounting. More specifically, the following aspects of cost accounting systems were examined: (i) the share of hospital costs reimbursed through DRG payment (%), (ii) the presence of mandatory cost accounting (yes/no) and/or costing guidelines (yes/no), (iii) the share of cost collecting hospitals (%), (iv) costing methods (see in detail below) and (v) data checks on reported cost data (national or regional level; regularity). With respect to costing methods, three subsequent steps in allocating hospital costs to DRGs were distinguished16,17: overhead allocation, indirect cost allocation and direct cost allocation. Overhead allocation concerned the allocation of hospital costs from the hospital level to clinical departments (commonly referred to as cost centre allocation or activity-based costing). The Supplementary Figure presents the three overhead allocation methods according to which the country’s DRG systems were categorized4,16,18: direct allocation, step-down allocation and reciprocal allocation. Indirect cost allocation concerned the allocation of overhead and indirect costs (e.g. the personnel costs of non-medical staff and inventory) from the department level to patients. Cost accounting
Accuracy
Methods
systems were categorized according to three indirect cost allocation methods4,17: the marginal mark-up method, weighting statistic method and relative value units. For more details on the different methods, we refer to Tan et al.17 Direct cost allocation concerned the allocation of direct costs (e.g. the personnel costs of medical staff, medications and materials) from the department level to patients. Figure 1 presents the four direct cost allocation methods that differ in their level of accuracy as is determined by the identification and measurement of hospital services, such as inpatient days and surgical procedures19–22: bottom-up microcosting, top-down microcosting, bottom-up gross costing and top-down gross costing. Bottom-up microcosting is generally believed to provide the most reliable cost estimates because all relevant cost components are identified and measured at the most detailed level. However, bottom-up microcosting is time-consuming, especially when cost accounting systems are absent or inadequate. For more details on the different methods, we refer to Tan et al.20
Top down gross costing
Top down micro costing
Bottom up gross costing
Bottom up micro costing
+
international differences and may help regulatory authorities and hospital managers to identify and improve areas of weakness in their cost accounting systems. Moreover, it may help health policymakers to underpin the development of a cost accounting system.
Measuring hospital services
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Figure 1 Direct cost allocation methods. Source: Tan SS, Rutten FF, van Ineveld BM, Redekop WK, et al. (2009).
Table 1 The share of hospital costs reimbursed through DRG payment in 12 European countries Country
The share of hospital Services covered by DRG-based payments costs reimbursed through DRG payment Inpatient Day Outpatient care care care
Austria England Estonia Finland
96% 60% 39% Varies by hospital France 80% Germany 80% Ireland 60% Portugal 80% The Netherlands 84% Spain/Catalonia 15-20% Sweden Varies by hospital
a: Acute inpatient care only. b: Surgical outpatient care only. c: In some districts only.
x xa x x
x x x x
x x xb xc
xa xa x x x x x x
x x x x x x
x
x
Services not covered by DRG-based payments
Psychiatric Rehabilitation Intensive Emergency Teaching Research Capital Expensive services services care care costs drugs x x
x
x x x x
x
Costs not covered by DRG-based payments
x
x
x
x
x
x x x x
x x
x x x x x x x x
x x
b
x x xb x
x x x x
x
x
x x x x x
x
x
x x
x x x x x
DRG systems in Europe
Table 2 The presence of mandatory cost accounting and national costing guidelines in 12 European countries1 Country
Presence of mandatory cost accounting system
Presence of national costing guidelines
Application of national cost data
Austria England Estonia Finland France Germany Ireland Poland Portugal The Netherlands Spain/Catalonia Sweden
No Yes No No No No No No Yes Yes No No
No Yes No No Yes Yes Yes No Yes Yes No Yes
Yes Yes Yes Yes Yes Yes No No No Yes No Yes
finances some costs via other funds. Services not commonly covered by DRG-based payments concern psychiatric and rehabilitation services and intensive and emergency care. In some countries, community and ambulance services (England), neonatology and inpatient radiotherapy (France), geriatric services (Ireland) and burn treatments (Sweden) are discarded. Costs for teaching and research are not covered by the majority of the 12 countries. Other costs commonly not covered are capital and expensive drug costs. In some countries, allowance for bad debts (Germany and Ireland), taxes, charges and insurance (Germany), pensions (Ireland), commercial exploitation (the Netherlands) and accreditation (Sweden) are discarded.
The presence of mandatory cost accounting and/or national costing guidelines Table 2 shows that three countries require all of their hospitals to have mandatory standardized cost accounting systems. Those and an additional four countries developed national costing guidelines that can be used by hospitals on a voluntary basis (e.g. for national comparisons on a standardized data set). For example, hospitals in France are recommended to apply a hospital cost accounting model called ‘analytical accounting’. In Ireland, regulation of cost data collection is enforced centrally using the costing manual and audits. In Sweden, national guidelines have been developed for cost-per-case calculations. However, most countries allow their hospitals to use a cost accounting system that best fulfils their own needs. Despite the presence of mandatory cost accounting and national costing guidelines, some variations in cost ascertainment may still exist within countries.
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service delivery, but the valuation of hospital services is based on a subset of 15–25 hospitals meeting predefined cost accounting standards. Four of the 12 European countries use DRG weights from abroad (Ireland, Poland, Portugal and Spain), but this does not mean that they do not collect cost data. Each of these countries uses cost data to adjust imported DRG weights to their local situation. For example, Poland only calculates DRG weights for specific procedures. DRG weights for the remaining procedures are determined relative to the DRG weights used in the UK. Portugal uses the lengths of stay in Portuguese hospitals to adjust imported DRG weights to their local situation. Ireland initially adopted a slightly modified version of the Australian Cost Weight methodology for casemix modelling. These DRG weights have been refreshed, localized and updated for the Irish health care system in subsequent years.
Costing methods Table 3 also presents the costing methods used to calculate own DRG weights. Although information was not always present at the same (level of) detail at the respective countries, the available data were described as precisely as possible. For example, the second column of table 3 specifies the share of all hospitals (Austria, England, Germany and the Netherlands) or the share of inpatient admissions (France and Sweden), total health expenditure (Estonia) or specialized care (Finland). Austrian hospitals can choose costing methods suitable to their needs. Hospitals financed by State Health Funds, for example, report highly aggregated cost data (113 of 264 hospitals in Austria). With respect to overhead allocation, the other European countries either use the direct method or the step-down method. Germany aims to use the step-down method in the hospitals from which cost data are collected, but also allows a combination of the step-down method and other methods, such as the direct method, if this is not feasible. For the allocation of overhead, indirect and direct costs at the department level to patients, most countries apply various weighting statistics in combination with the microcosting methodology. Some countries record cost data at the patient level and apply the bottom-up approach to allocate costs to individual patients. Countries in which patient level cost data are not available apply the top-down approach to allocate costs to average patients (table 3). In England, a working group of costing experts supports the implementation of Patient Level Information and Costing Systems within the National Health Service. As of yet, the implementation of Patient Level Information and Costing Systems is not mandatory, and the number of hospitals that have introduced patient level costing is not known. In Estonia, France and Germany, cost calculation is a combination of top-down and bottom-up accounting.
Data checks on reported cost data The share of cost collecting hospitals Table 2 also shows that eight European countries apply their own national cost data. Although the shares of cost collecting hospitals cannot be compared in a straightforward way, they roughly range from 8% of all hospitals in Austria to 100% in England. In these eight countries, the cost calculation of DRGs is based on a selected number of hospitals from which reliable cost data can be collected and pooled. Table 3 presents the share of cost collecting hospitals. In some countries, selected hospitals typically use comparable cost accounting systems meeting predefined quality standards (Finland, Germany and Sweden). In other countries, cost data may also be collected at a sample of hospitals having contracts with the national health insurance fund (Estonia) or participating in ongoing projects (France). Other countries require all hospitals to report their cost data annually to their regulatory authority (England). The regulatory authority in the Netherlands requires all hospitals to report their
Countries recording cost data at the patient level require their cost collecting hospitals to report minimum basic data sets for each patient (table 3). This data set contains patient and hospital characteristics, clinical parameters and cost data. Minimum basic data sets regarding cost data are fairly similar across the European countries. For example, Finland collects cost data of inpatient days, outpatient visits, laboratory services, medical imaging services, medications, blood products, surgical procedures and pathological services. In most countries, data checks on reported cost data take place internally at the hospitals (table 3). Additionally, data checks are commonly performed annually either by the national or regional authority. In Finland, the data quality assurance is the sole responsibility of the hospitals, as no official data quality and plausibility checks are undertaken at the national or regional level. In Sweden, the National Board of Health and Welfare publishes reports on coding activity and quality by research on the national patient
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Table 3 The share of cost collecting hospitals, costing methods and data checks on reported cost data in eight European countriesa Country
Number (share) of cost collecting hospitals
Overhead allocation
Indirect cost allocation
Direct cost allocation
Presence of minimal data set
Data checks on reported cost data
Austria
Twenty reference hospitals (8% of all hospitals) All hospitals
Varying by hospital
Varying by hospital
Mainly gross costing
Yes
Regional authority, regularly
Direct method Direct method
Top-down microcosting Mainly top-down microcosting
No
Hospitals contracted with the national health insurance fund (65% of total health expenditure) Five reference hospitals meeting particular cost accounting standards (30% of specialized care) Ninety-nine volunteering hospitals participating in the hospital cost database ENCC (13% of inpatient admissions) About 225 volunteering hospitals meeting InEK cost accounting standards (13% of all hospitals) Resource use: all hospitals; unit costs: 15-25 volunteering general hospitals (24% of all hospitals) Hospitals with case costing systems (62% of inpatient admissions)
Weighting statistics Mainly mark-up percentage
National authority, annually National authority, annually
Direct method
Weighting statistics
Bottom-up microcosting
Yes
No (responsibility of hospitals)
Step-down method
Weighting statistics
Mainly top-down microcosting
No
Regional authority, annually
Preferably stepdown method
Weighting statistics
Mainly top-down microcosting
Yes
National authority, annually
Direct method
Weighting statistics
Bottom-up microcosting
Yes
National authority, annually
Direct method
Weighting statistics
Bottom-up microcosting
yes
National and regional authority, annually
England Estonia
Finland
France
Germany
the Netherlands
Sweden
No
a: Ireland, Poland, Portugal and Spain import DRG weights from abroad. ENCC = l’E´tude Nationale de Couˆts a` me´thodologie Commune; InEK = Institut fu¨r das Entgeltsystem im Krankenhaus.
register, but it is the county councils’ responsibility to check the quality of data by means of case record audits. In most countries, national/regional data checks primarily focus on resource use information in technical and clinical validity, i.e. coded hospital services are held against certain patient and hospital characteristics. In some countries, data checks are additionally performed on cost data. Cost data are either checked for all hospitals (Germany, the Netherlands and Sweden) or for random samples (Austria, England, Estonia and France). In Germany, for example, service costs are compared with minimum and maximum values, cost ratios between hospital services and corresponding resource use information.
Discussion The cost accounting systems of European countries vary widely by the share of hospital costs reimbursed through DRG payment, the presence of mandatory cost accounting and/or costing guidelines, the share of cost collecting hospitals, costing methods and data checks on reported cost data. Each of these aspects entails a tradeoff between accuracy of the cost data and feasibility constraints. The first trade-off arises in deciding on the share of hospital costs reimbursed through DRG payment. DRG payment is the principal means of reimbursing hospitals in many European countries. A large share increases the relative importance of any DRG system, but may jeopardize the primary objectives of hospital service delivery: the usual incentive set by the DRG system to shorten the patient’s
length of stay may be considered harmful in certain specialties (e.g. intensive care), diagnoses related to some specialties may poorly predict costs (e.g. psychiatric care) or the cost calculation for some rarely delivered hospital services may not be considered sufficiently accurate (e.g. multiple trauma care).3 Another trade-off arises in deciding on the share of cost collecting hospitals.9,19,20 In Europe, this share roughly ranges from 8% of all hospitals in Austria to 100% in England. A small number of wellchosen cost collecting hospitals—with comparable, highly accurate cost accounting systems—may enable the data quality obtained to be higher, but with the disadvantage that data on infrequently used hospital services may not be available. A large number of cost collecting hospitals may provide a clearer picture of differences in the severity of cases or in the structure of hospitals in a particular country during the calculations. More obvious trade-offs relate to costing methods. The reciprocal method theoretically allocates hospital costs most accurately, but is believed to be more time-consuming than the methods used across Europe (‘step down’ and ‘direct’ methods). Similarly, relative value units are believed to reflect resource consumption most accurately, but their calculation requires more detailed data than operational methods (weighting statistics and marginal mark-up percentages). Although bottom-up microcosting is generally believed to provide the most reliable cost estimates, existing literature commonly mentions its risk of over-estimating costs, whereas gross costing is considered to be more reconciled with reality at the macro level.4,7,19,20 However, as they concern single hospital services, the
DRG systems in Europe
development and updating of DRG systems and calculation of DRG prices for the reimbursement of hospitals require the micro level. Therefore, bottom-up microcosting may be the only way to truly measure, compare and improve the efficiency of hospital service delivery. It allows for validating cost homogeneities, adjusting DRG weights and detecting cost outliers.20,23 However, if hospitals do not collect patient-level cost data, countries need to rely on top-down microcosting (or gross costing). As the current clinical practice changes and new data sources become available, periodic updating of DRG systems is crucial. Improvement may include tailoring costing methods to specific DRGs: bottom-up microcosting could be applied to services accounting for a large share of DRG costs or to services for which data collection is reasonably feasible. Less accurate methods can then be used for the remaining services. Some countries have problems incentivizing hospitals to participate in voluntary data collection. To encourage the compliance to predefined cost accounting standards, regional authorities in France award the yearly salary for a financial controller to each of the hospitals providing cost data; Germany introduced such payments in 2005.3 However, it is likely that only cost-inefficient hospitals would participate if cost collection is voluntary, as participation of cost-efficient hospitals would lead to decreased price levels. Nonmonetary incentives could also motivate hospitals to volunteer to take part in a data sample. In Italy, for example, cost collecting hospitals were provided the opportunity to influence reimbursement rates.3,24 Alternatively, regulatory authorities may decide to randomly select hospitals year-by-year, incorporate a deduction percentage to adjust for high price levels or make cost accounting mandatory. Even though our study did not intend to make any recommendations concerning these trade-offs, this cross-country comparison gives insight into international differences and may help regulatory authorities and hospital managers to identify and improve areas of weakness in their cost accounting systems. Moreover, it may help health policymakers to underpin the development of a cost accounting system. Although their objectives may vary, an increasing number of low- and middle-income countries are gradually implementing DRG systems.25,26 These countries largely face challenges comparable with those in developed countries, but their cost accounting is even more restricted by availability and quality of data. Regardless of their stage in DRG system development, health policymakers in low- and middle-income countries may especially benefit from our comparison of cost accounting systems to investigate the feasibility to develop a DRG system using existing national data.27 In the efforts to developing and further improving cost accounting systems, two observations are important. First, the presented cost accounting systems reflect the current situation, but their dynamics are subject to change. Second, there is in general no ‘best’ cost accounting system, because trade-offs must be based on the characteristics of the national health systems concerned, as well as on the objective that health policymakers want to achieve by using DRG systems. For example, if countries want to allocate a larger share of hospital revenues through DRGs, high-quality cost accounting data, which can be obtained through bottom-up microcosting, large data samples and data checks, are becoming increasingly important. The present article is the first to compare cost accounting systems used for the development of DRG systems in 12 European countries at the whole system level. Even though countries face similar choices in defining their DRG systems, each country has implemented its own unique cost accounting system. Despite their differences, all countries will likely have to deal with many of the same issues concerning the ongoing process of developing and updating DRGs and cost accounting systems in the years to come. An overall similarity in the challenges encountered may, in time, lead to greater interest in finding common solutions adjustable for each country.
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Supplementary data Supplementary data are available at EURPUB online.
Acknowledgements The results presented in this article were generated as part of the project ‘Diagnosis-Related Groups in Europe: Towards Efficiency and Quality (EuroDRG)’, which was funded by the European Commission within the 7th Framework Programme (Grant Agreement Number FP7-223300). The authors are grateful to all project partners who made this work possible.
Funding European Commission within the 7th Framework Programme (FP7223300). Conflicts of interest: None declared.
Key points The cost accounting systems of European countries vary widely by the share of hospital costs reimbursed through DRG payment, the presence of mandatory cost accounting and/or costing guidelines, the share of cost collecting hospitals, costing methods and data checks on reported cost data. In deciding on the share of hospital costs reimbursed through DRG payment, the presence of mandatory cost accounting and/or costing guidelines, the share of cost collecting hospitals, costing methods and data checks on reported cost data, trade-offs must be made between accuracy of the cost data and feasibility constraints. There is in general no ‘best’ cost accounting system, because the choices with regard to cost accounting must be based on the characteristics of the national health systems concerned, as well as on the objective that health policymakers want to achieve by using DRG systems. This cross-country comparison of 12 European countries may help regulatory authorities and hospital managers to identify and improve areas of weakness in their cost accounting systems and may help health policymakers to underpin the development of a cost accounting system.
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Skeie B, Mishra V, Vaaler S, et al. A comparison of actual cost, DRG-based cost, and hospital reimbursement for liver transplant patients. Transpl Int 2002;15:439–45.
10 Tan SS, Oppe M, Zoet-Nugteren SK, et al. A microcosting study of diagnostic tests for the detection of coronary artery disease in The Netherlands. Eur J Radiol 2009; 72:98–103. 11 Dormont B, Milcent C. The sources of hospital cost variability. Health Econ 2004;13: 927–39. 12 Lotter O, Jaminet P, Amr A, et al. Reimbursement of burns by DRG in four European countries: an analysis. Burns 2011;37:1109–16. 13 Pirson M, Schenker L, Martins D, et al. What can we learn from international comparisons of costs by DRG? Eur J Health Econ 2013;14:67–73. 14 Busse R, Geissler A, Quentin W, et al. Diagnosis-Related Groups in Europe: moving towards transparency, efficiency and quality in hospitals, 1st edn. Buckingham: Open University Press and WHO Regional Office for Europe, 2011. 15 Scheller-Kreinsen D, Quentin W, Busse R. DRG-based hospital payment systems and technological innovation in 12 European countries. Value Health 2011;14: 1166–72. 16 St-Hilaire C, Crepeau PK. Hospital and unit cost allocation methods. Healthc Manage Forum 2000;13:12–32.
18 Williams SV, Finkler SA, Murphy CM, et al. Improved cost allocation in case-mix accounting. Med Care 1982;20:450–9. 19 Clement Nee Shrive FM, Ghali WA, Donaldson C, et al. The impact of using different costing methods on the results of an economic evaluation of cardiac care: microcosting vs gross-costing approaches. Health Econ 2009;18:377–88. 20 Tan SS, Rutten FF, van Ineveld BM, et al. Comparing methodologies for the cost estimation of hospital services. Eur J Health Econ 2009;10:39–45. 21 Wordsworth S, Ludbrook A, Caskey F, et al. Collecting unit cost data in multicentre studies. Creating comparable methods. Eur J Health Econ 2005;6:38–44. 22 Swindle R, Lukas CV, Meyer DA, et al. Cost analysis in the Department of Veterans Affairs: consensus and future directions. Med Care 1999;37:AS3–8. 23 Jackson T. Cost estimates for hospital inpatient care in Australia: evaluation of alternative sources. Aust N Z J Public Health 2000;24:234–41. 24 Fattore G, Torbica A. Inpatient reimbursement system in Italy: how do tariffs relate to costs. Health Care Manag Sci 2006;9:251–8. 25 Forgione DA, Vermeer TE, Surysekar K, et al. The impact of DRG-based payment systems on quality of health care in OECD countries. J Health Care Finance 2004;31: 41–54. 26 Pongpirul K, Walker DG, Rahman H, et al. DRG coding practice: a nationwide hospital survey in Thailand. BMC Health Serv Res 2011;11:290. 27 Ghaffari S, Doran C, Wilson A, et al. Investigating DRG cost weights for hospitals in middle income countries. Int J Health Plann Manage 2009;24:251–64.
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......................................................................................................... European Journal of Public Health, Vol. 24, No. 6, 1028–1033 ß The Author 2014. Published by Oxford University Press on behalf of the European Public Health Association. All rights reserved. doi:10.1093/eurpub/cku037 Advance Access published on 3 April 2014
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Direct health care costs of hospital admissions due to adverse events in the Netherlands Fabienne J. H. Magdelijns1, Patricia M. Stassen1,2,3, Coen D. A. Stehouwer1,4, Evelien Pijpers1,5 1 Division of General Medicine, Department of Internal Medicine, Maastricht University Medical Centre, Maastricht University, Maastricht, The Netherlands 2 Division of Acute Medicine, Department of Internal Medicine, Maastricht University Medical Centre, Maastricht University, Maastricht, The Netherlands 3 School of CAPHRI, Maastricht University Medical Centre, Maastricht University, Maastricht, The Netherlands 4 Cardiovascular Research Institute, Maastricht University Medical Centre, Maastricht University, Maastricht, The Netherlands 5 Section of Clinical Geriatric Medicine, Maastricht University Medical Centre, Maastricht University, Maastricht, The Netherlands Correspondence: Fabienne J. H. Magdelijns, Department of Internal Medicine, Maastricht University Medical Centre, Maastricht University, 6202 AZ Maastricht, The Netherlands, Tel: +31 (0)43 3875100, Fax: +31 (0)43 3877822, e-mail: [email protected]
Background: Health care-related adverse events (AEs) are common, and the economic burden is substantial. Information on costs of health care-related AEs ‘leading’ to hospitalization is limited and has focused on adverse drug events. Aim: To provide insight into costs of admissions due to (preventable) health care-related AEs, not limited to adverse drug events. Methods: This study was conducted during a 5-month period (May–September 2010) in the Netherlands, in a 600-bed university medical centre. All patients who were admitted via the emergency department to an internal medicine department because of a health care-related AE were included. We retrospectively retrieved all data on medical information as well as health care resource utilization from the patient’s medical record. The cost of the admission was estimated (for each patient individually) by multiplying the number of resources by their specific unit cost and then summing all costs per patient. Results: In total, 324 admissions due to a health care-related AE were included (28.7% of all admissions). Total direct health care costs of these hospitalizations amounted to E1 404 070 in a 5-month period. Medication-related AEs were most common (43.5%) and contributed most to the costs (E587 550; 41.8%). Inpatient days were most expensive (E1 076 385; 77.3%). Preventable health care-related AEs accounted for E277 665 (19.8%). Conclusion: We found that health care-related AEs are expensive, with preventable health care-related AEs accounting for one-fifth of the costs. Awareness of possible health care-related AEs following medical actions is necessary to reduce already high health care costs.
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......................................................................................................... European Journal of Public Health, Vol. 24, No. 6, 1023–1028 ß The Author 2014. Published by Oxford University Press on behalf of the European Public Health Association. All rights reserved. doi:10.1093/eurpub/cku025 Advance Access published on 13 March 2014
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DRG systems in Europe: variations in cost accounting systems among 12 countries Siok Swan Tan1, Alexander Geissler2, Lisbeth Serde´n3, Mona Heurgren3, B. Martin van Ineveld1, W. Ken Redekop1, Leona Hakkaart-van Roijen1, on behalf of the EuroDRG group4 1 2 3 4
Institute for Medical Technology Assessment, Erasmus Universiteit Rotterdam, Rotterdam, the Netherlands Department of Health Care Management, Berlin University of Technology, Berlin, Germany National Board of Health and Welfare, Stockholm, Sweden http://www.eurodrg.eu/EuroDRG_Group.pdf
Correspondence: Siok Swan Tan, Erasmus Universiteit Rotterdam, Institute for Medical Technology Assessment, P.O. Box 1738, 3000 DR Rotterdam, Netherlands, Tel: +31-10-4088623, Fax: +31-10-4089081, e-mail: [email protected]
Background: Diagnosis-related group (DRG)-based hospital payment systems have gradually become the principal means of reimbursing hospitals in many European countries. Owing to the absence or inaccuracy of costs related to DRGs, these countries have started to routinely collect cost accounting data. The aim of the present article was to compare the cost accounting systems of 12 European countries. Methods: A standardized questionnaire was developed to guide comprehensive cost accounting system descriptions for each of the 12 participating countries. Results: The cost accounting systems of European countries vary widely by the share of hospital costs reimbursed through DRG payment, the presence of mandatory cost accounting and/or costing guidelines, the share of cost collecting hospitals, costing methods and data checks on reported cost data. Each of these aspects entails a tradeoff between accuracy of the cost data and feasibility constraints. Conclusion: Although a ‘best’ cost accounting system does not exist, our cross-country comparison gives insight into international differences and may help regulatory authorities and hospital managers to identify and improve areas of weakness in their cost accounting systems. Moreover, it may help health policymakers to underpin the development of a cost accounting system.
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Introduction Diagnosis-related group systems With the objective of improving the efficiency of hospital service delivery, diagnosis-related group (DRG) systems have gradually become the principal means of reimbursing hospitals in many European countries.1 The basic idea of DRG systems is that patients are classified into a limited number of DRGs, which are supposed to be clinically meaningful and relatively homogenous in their resource consumption patterns.2 Although each country implemented its own unique DRG system, the Health Care Financing Administration system introduced in 1983 in the USA commonly served as a basis for the DRG systems used in European countries.3 However, some countries such as Austria and the Netherlands have developed their own DRG system.
Cost accounting In health care, cost accounting predominantly aims to support managerial decisions and to monitor and control the resource consumption with respect to hospital service delivery.4 Cost accounting data are used to develop and update DRG systems and are necessary to calculate DRG prices for the reimbursement of hospitals. Owing to the absence or inaccuracy of costs related to DRGs, many European countries have started to routinely collect cost accounting data.5,6 After all, hospitals are likely to be over- or underpaid for specific DRGs if cost data are inaccurate. Although profitable DRGs may, in practice, compensate for less profitable DRGs, hospitals are disincentivized to improve efficiency for certain groups of patients if cost accounting leads to overestimated payments for a specific DRG. On the other hand, hospitals are disincentivized to provide unprofitable high-quality care if cost accounting leads to underestimated payments for a specific DRG.
The introduction of DRGs throughout Europe has stimulated the comparison of DRG systems and their performance. For example, many studies have tried to explain the wide cost variations by DRG.7–11 These studies considered the patient casemix, medical practice patterns (e.g. presence of innovative procedures), financial incentives and relative and absolute prices between countries to be potential factors influencing cost differences. However, many of the observed cost differences relate to differences in some aspects of cost accounting systems.
Cost accounting systems Cost accounting systems provide mechanisms to identify the sources of costs related to DRGs, which allows for validating cost homogeneities, adjusting DRG weights and detecting cost outliers.6 Aspects of cost accounting systems comprise: (i) the share of hospital costs reimbursed through DRG payment, (ii) the presence of mandatory cost accounting and/or costing guidelines, (iii) the share of cost collecting hospitals, (iv) costing methods and (v) data checks on reported cost data. Although some studies have compared aspects of cost accounting systems,8,12,13 they did not specifically focus on costing methods, included a limited number of countries and/or were conducted at the individual DRG level. As part of the EuroDRGproject, detailed descriptions are provided of the contextual factors that led to the cost accounting systems implemented in 12 European countries, namely, Austria, England, Estonia, Finland, France, Germany, Ireland, the Netherlands, Poland, Portugal, Spain/Catalonia and Sweden.14 The specific aim of the present article is to compare the cost accounting systems of these 12 European countries at the whole system level. Although a ‘best’ cost accounting system does not exist, our cross-country comparison gives insight into
European Journal of Public Health
Results The share of hospital costs reimbursed through DRG-based payment Table 1 shows that DRG-based payment is the principal means of reimbursing hospitals in the majority of countries. However, DRGbased payment accounted for just 15–20% of the total revenues in Spain/Catalonia and 39% in Estonia. Furthermore, each country Identifying hospital services Accuracy
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+
-
The hospital cost accounting systems of 12 European countries were compared at the whole system level. The 12 countries were selected based on their geographical region, health system typology and their duration of affiliation to the European Union, to ensure a comparison of countries with truly different characteristics. A standardized questionnaire was developed to guide comprehensive DRG system descriptions for each of the 12 participating countries. The development process has been described in detail elsewhere.15 In short, laws, regulations and scientific and grey literature for each country were reviewed, summarized in overview tables and verified by national researchers. All analyses were based on 2008 data. One section of the questionnaire focused specifically on how each country’s DRG system deals with cost accounting. More specifically, the following aspects of cost accounting systems were examined: (i) the share of hospital costs reimbursed through DRG payment (%), (ii) the presence of mandatory cost accounting (yes/no) and/or costing guidelines (yes/no), (iii) the share of cost collecting hospitals (%), (iv) costing methods (see in detail below) and (v) data checks on reported cost data (national or regional level; regularity). With respect to costing methods, three subsequent steps in allocating hospital costs to DRGs were distinguished16,17: overhead allocation, indirect cost allocation and direct cost allocation. Overhead allocation concerned the allocation of hospital costs from the hospital level to clinical departments (commonly referred to as cost centre allocation or activity-based costing). The Supplementary Figure presents the three overhead allocation methods according to which the country’s DRG systems were categorized4,16,18: direct allocation, step-down allocation and reciprocal allocation. Indirect cost allocation concerned the allocation of overhead and indirect costs (e.g. the personnel costs of non-medical staff and inventory) from the department level to patients. Cost accounting
Accuracy
Methods
systems were categorized according to three indirect cost allocation methods4,17: the marginal mark-up method, weighting statistic method and relative value units. For more details on the different methods, we refer to Tan et al.17 Direct cost allocation concerned the allocation of direct costs (e.g. the personnel costs of medical staff, medications and materials) from the department level to patients. Figure 1 presents the four direct cost allocation methods that differ in their level of accuracy as is determined by the identification and measurement of hospital services, such as inpatient days and surgical procedures19–22: bottom-up microcosting, top-down microcosting, bottom-up gross costing and top-down gross costing. Bottom-up microcosting is generally believed to provide the most reliable cost estimates because all relevant cost components are identified and measured at the most detailed level. However, bottom-up microcosting is time-consuming, especially when cost accounting systems are absent or inadequate. For more details on the different methods, we refer to Tan et al.20
Top down gross costing
Top down micro costing
Bottom up gross costing
Bottom up micro costing
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international differences and may help regulatory authorities and hospital managers to identify and improve areas of weakness in their cost accounting systems. Moreover, it may help health policymakers to underpin the development of a cost accounting system.
Measuring hospital services
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Figure 1 Direct cost allocation methods. Source: Tan SS, Rutten FF, van Ineveld BM, Redekop WK, et al. (2009).
Table 1 The share of hospital costs reimbursed through DRG payment in 12 European countries Country
The share of hospital Services covered by DRG-based payments costs reimbursed through DRG payment Inpatient Day Outpatient care care care
Austria England Estonia Finland
96% 60% 39% Varies by hospital France 80% Germany 80% Ireland 60% Portugal 80% The Netherlands 84% Spain/Catalonia 15-20% Sweden Varies by hospital
a: Acute inpatient care only. b: Surgical outpatient care only. c: In some districts only.
x xa x x
x x x x
x x xb xc
xa xa x x x x x x
x x x x x x
x
x
Services not covered by DRG-based payments
Psychiatric Rehabilitation Intensive Emergency Teaching Research Capital Expensive services services care care costs drugs x x
x
x x x x
x
Costs not covered by DRG-based payments
x
x
x
x
x
x x x x
x x
x x x x x x x x
x x
b
x x xb x
x x x x
x
x
x x x x x
x
x
x x
x x x x x
DRG systems in Europe
Table 2 The presence of mandatory cost accounting and national costing guidelines in 12 European countries1 Country
Presence of mandatory cost accounting system
Presence of national costing guidelines
Application of national cost data
Austria England Estonia Finland France Germany Ireland Poland Portugal The Netherlands Spain/Catalonia Sweden
No Yes No No No No No No Yes Yes No No
No Yes No No Yes Yes Yes No Yes Yes No Yes
Yes Yes Yes Yes Yes Yes No No No Yes No Yes
finances some costs via other funds. Services not commonly covered by DRG-based payments concern psychiatric and rehabilitation services and intensive and emergency care. In some countries, community and ambulance services (England), neonatology and inpatient radiotherapy (France), geriatric services (Ireland) and burn treatments (Sweden) are discarded. Costs for teaching and research are not covered by the majority of the 12 countries. Other costs commonly not covered are capital and expensive drug costs. In some countries, allowance for bad debts (Germany and Ireland), taxes, charges and insurance (Germany), pensions (Ireland), commercial exploitation (the Netherlands) and accreditation (Sweden) are discarded.
The presence of mandatory cost accounting and/or national costing guidelines Table 2 shows that three countries require all of their hospitals to have mandatory standardized cost accounting systems. Those and an additional four countries developed national costing guidelines that can be used by hospitals on a voluntary basis (e.g. for national comparisons on a standardized data set). For example, hospitals in France are recommended to apply a hospital cost accounting model called ‘analytical accounting’. In Ireland, regulation of cost data collection is enforced centrally using the costing manual and audits. In Sweden, national guidelines have been developed for cost-per-case calculations. However, most countries allow their hospitals to use a cost accounting system that best fulfils their own needs. Despite the presence of mandatory cost accounting and national costing guidelines, some variations in cost ascertainment may still exist within countries.
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service delivery, but the valuation of hospital services is based on a subset of 15–25 hospitals meeting predefined cost accounting standards. Four of the 12 European countries use DRG weights from abroad (Ireland, Poland, Portugal and Spain), but this does not mean that they do not collect cost data. Each of these countries uses cost data to adjust imported DRG weights to their local situation. For example, Poland only calculates DRG weights for specific procedures. DRG weights for the remaining procedures are determined relative to the DRG weights used in the UK. Portugal uses the lengths of stay in Portuguese hospitals to adjust imported DRG weights to their local situation. Ireland initially adopted a slightly modified version of the Australian Cost Weight methodology for casemix modelling. These DRG weights have been refreshed, localized and updated for the Irish health care system in subsequent years.
Costing methods Table 3 also presents the costing methods used to calculate own DRG weights. Although information was not always present at the same (level of) detail at the respective countries, the available data were described as precisely as possible. For example, the second column of table 3 specifies the share of all hospitals (Austria, England, Germany and the Netherlands) or the share of inpatient admissions (France and Sweden), total health expenditure (Estonia) or specialized care (Finland). Austrian hospitals can choose costing methods suitable to their needs. Hospitals financed by State Health Funds, for example, report highly aggregated cost data (113 of 264 hospitals in Austria). With respect to overhead allocation, the other European countries either use the direct method or the step-down method. Germany aims to use the step-down method in the hospitals from which cost data are collected, but also allows a combination of the step-down method and other methods, such as the direct method, if this is not feasible. For the allocation of overhead, indirect and direct costs at the department level to patients, most countries apply various weighting statistics in combination with the microcosting methodology. Some countries record cost data at the patient level and apply the bottom-up approach to allocate costs to individual patients. Countries in which patient level cost data are not available apply the top-down approach to allocate costs to average patients (table 3). In England, a working group of costing experts supports the implementation of Patient Level Information and Costing Systems within the National Health Service. As of yet, the implementation of Patient Level Information and Costing Systems is not mandatory, and the number of hospitals that have introduced patient level costing is not known. In Estonia, France and Germany, cost calculation is a combination of top-down and bottom-up accounting.
Data checks on reported cost data The share of cost collecting hospitals Table 2 also shows that eight European countries apply their own national cost data. Although the shares of cost collecting hospitals cannot be compared in a straightforward way, they roughly range from 8% of all hospitals in Austria to 100% in England. In these eight countries, the cost calculation of DRGs is based on a selected number of hospitals from which reliable cost data can be collected and pooled. Table 3 presents the share of cost collecting hospitals. In some countries, selected hospitals typically use comparable cost accounting systems meeting predefined quality standards (Finland, Germany and Sweden). In other countries, cost data may also be collected at a sample of hospitals having contracts with the national health insurance fund (Estonia) or participating in ongoing projects (France). Other countries require all hospitals to report their cost data annually to their regulatory authority (England). The regulatory authority in the Netherlands requires all hospitals to report their
Countries recording cost data at the patient level require their cost collecting hospitals to report minimum basic data sets for each patient (table 3). This data set contains patient and hospital characteristics, clinical parameters and cost data. Minimum basic data sets regarding cost data are fairly similar across the European countries. For example, Finland collects cost data of inpatient days, outpatient visits, laboratory services, medical imaging services, medications, blood products, surgical procedures and pathological services. In most countries, data checks on reported cost data take place internally at the hospitals (table 3). Additionally, data checks are commonly performed annually either by the national or regional authority. In Finland, the data quality assurance is the sole responsibility of the hospitals, as no official data quality and plausibility checks are undertaken at the national or regional level. In Sweden, the National Board of Health and Welfare publishes reports on coding activity and quality by research on the national patient
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Table 3 The share of cost collecting hospitals, costing methods and data checks on reported cost data in eight European countriesa Country
Number (share) of cost collecting hospitals
Overhead allocation
Indirect cost allocation
Direct cost allocation
Presence of minimal data set
Data checks on reported cost data
Austria
Twenty reference hospitals (8% of all hospitals) All hospitals
Varying by hospital
Varying by hospital
Mainly gross costing
Yes
Regional authority, regularly
Direct method Direct method
Top-down microcosting Mainly top-down microcosting
No
Hospitals contracted with the national health insurance fund (65% of total health expenditure) Five reference hospitals meeting particular cost accounting standards (30% of specialized care) Ninety-nine volunteering hospitals participating in the hospital cost database ENCC (13% of inpatient admissions) About 225 volunteering hospitals meeting InEK cost accounting standards (13% of all hospitals) Resource use: all hospitals; unit costs: 15-25 volunteering general hospitals (24% of all hospitals) Hospitals with case costing systems (62% of inpatient admissions)
Weighting statistics Mainly mark-up percentage
National authority, annually National authority, annually
Direct method
Weighting statistics
Bottom-up microcosting
Yes
No (responsibility of hospitals)
Step-down method
Weighting statistics
Mainly top-down microcosting
No
Regional authority, annually
Preferably stepdown method
Weighting statistics
Mainly top-down microcosting
Yes
National authority, annually
Direct method
Weighting statistics
Bottom-up microcosting
Yes
National authority, annually
Direct method
Weighting statistics
Bottom-up microcosting
yes
National and regional authority, annually
England Estonia
Finland
France
Germany
the Netherlands
Sweden
No
a: Ireland, Poland, Portugal and Spain import DRG weights from abroad. ENCC = l’E´tude Nationale de Couˆts a` me´thodologie Commune; InEK = Institut fu¨r das Entgeltsystem im Krankenhaus.
register, but it is the county councils’ responsibility to check the quality of data by means of case record audits. In most countries, national/regional data checks primarily focus on resource use information in technical and clinical validity, i.e. coded hospital services are held against certain patient and hospital characteristics. In some countries, data checks are additionally performed on cost data. Cost data are either checked for all hospitals (Germany, the Netherlands and Sweden) or for random samples (Austria, England, Estonia and France). In Germany, for example, service costs are compared with minimum and maximum values, cost ratios between hospital services and corresponding resource use information.
Discussion The cost accounting systems of European countries vary widely by the share of hospital costs reimbursed through DRG payment, the presence of mandatory cost accounting and/or costing guidelines, the share of cost collecting hospitals, costing methods and data checks on reported cost data. Each of these aspects entails a tradeoff between accuracy of the cost data and feasibility constraints. The first trade-off arises in deciding on the share of hospital costs reimbursed through DRG payment. DRG payment is the principal means of reimbursing hospitals in many European countries. A large share increases the relative importance of any DRG system, but may jeopardize the primary objectives of hospital service delivery: the usual incentive set by the DRG system to shorten the patient’s
length of stay may be considered harmful in certain specialties (e.g. intensive care), diagnoses related to some specialties may poorly predict costs (e.g. psychiatric care) or the cost calculation for some rarely delivered hospital services may not be considered sufficiently accurate (e.g. multiple trauma care).3 Another trade-off arises in deciding on the share of cost collecting hospitals.9,19,20 In Europe, this share roughly ranges from 8% of all hospitals in Austria to 100% in England. A small number of wellchosen cost collecting hospitals—with comparable, highly accurate cost accounting systems—may enable the data quality obtained to be higher, but with the disadvantage that data on infrequently used hospital services may not be available. A large number of cost collecting hospitals may provide a clearer picture of differences in the severity of cases or in the structure of hospitals in a particular country during the calculations. More obvious trade-offs relate to costing methods. The reciprocal method theoretically allocates hospital costs most accurately, but is believed to be more time-consuming than the methods used across Europe (‘step down’ and ‘direct’ methods). Similarly, relative value units are believed to reflect resource consumption most accurately, but their calculation requires more detailed data than operational methods (weighting statistics and marginal mark-up percentages). Although bottom-up microcosting is generally believed to provide the most reliable cost estimates, existing literature commonly mentions its risk of over-estimating costs, whereas gross costing is considered to be more reconciled with reality at the macro level.4,7,19,20 However, as they concern single hospital services, the
DRG systems in Europe
development and updating of DRG systems and calculation of DRG prices for the reimbursement of hospitals require the micro level. Therefore, bottom-up microcosting may be the only way to truly measure, compare and improve the efficiency of hospital service delivery. It allows for validating cost homogeneities, adjusting DRG weights and detecting cost outliers.20,23 However, if hospitals do not collect patient-level cost data, countries need to rely on top-down microcosting (or gross costing). As the current clinical practice changes and new data sources become available, periodic updating of DRG systems is crucial. Improvement may include tailoring costing methods to specific DRGs: bottom-up microcosting could be applied to services accounting for a large share of DRG costs or to services for which data collection is reasonably feasible. Less accurate methods can then be used for the remaining services. Some countries have problems incentivizing hospitals to participate in voluntary data collection. To encourage the compliance to predefined cost accounting standards, regional authorities in France award the yearly salary for a financial controller to each of the hospitals providing cost data; Germany introduced such payments in 2005.3 However, it is likely that only cost-inefficient hospitals would participate if cost collection is voluntary, as participation of cost-efficient hospitals would lead to decreased price levels. Nonmonetary incentives could also motivate hospitals to volunteer to take part in a data sample. In Italy, for example, cost collecting hospitals were provided the opportunity to influence reimbursement rates.3,24 Alternatively, regulatory authorities may decide to randomly select hospitals year-by-year, incorporate a deduction percentage to adjust for high price levels or make cost accounting mandatory. Even though our study did not intend to make any recommendations concerning these trade-offs, this cross-country comparison gives insight into international differences and may help regulatory authorities and hospital managers to identify and improve areas of weakness in their cost accounting systems. Moreover, it may help health policymakers to underpin the development of a cost accounting system. Although their objectives may vary, an increasing number of low- and middle-income countries are gradually implementing DRG systems.25,26 These countries largely face challenges comparable with those in developed countries, but their cost accounting is even more restricted by availability and quality of data. Regardless of their stage in DRG system development, health policymakers in low- and middle-income countries may especially benefit from our comparison of cost accounting systems to investigate the feasibility to develop a DRG system using existing national data.27 In the efforts to developing and further improving cost accounting systems, two observations are important. First, the presented cost accounting systems reflect the current situation, but their dynamics are subject to change. Second, there is in general no ‘best’ cost accounting system, because trade-offs must be based on the characteristics of the national health systems concerned, as well as on the objective that health policymakers want to achieve by using DRG systems. For example, if countries want to allocate a larger share of hospital revenues through DRGs, high-quality cost accounting data, which can be obtained through bottom-up microcosting, large data samples and data checks, are becoming increasingly important. The present article is the first to compare cost accounting systems used for the development of DRG systems in 12 European countries at the whole system level. Even though countries face similar choices in defining their DRG systems, each country has implemented its own unique cost accounting system. Despite their differences, all countries will likely have to deal with many of the same issues concerning the ongoing process of developing and updating DRGs and cost accounting systems in the years to come. An overall similarity in the challenges encountered may, in time, lead to greater interest in finding common solutions adjustable for each country.
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Supplementary data Supplementary data are available at EURPUB online.
Acknowledgements The results presented in this article were generated as part of the project ‘Diagnosis-Related Groups in Europe: Towards Efficiency and Quality (EuroDRG)’, which was funded by the European Commission within the 7th Framework Programme (Grant Agreement Number FP7-223300). The authors are grateful to all project partners who made this work possible.
Funding European Commission within the 7th Framework Programme (FP7223300). Conflicts of interest: None declared.
Key points The cost accounting systems of European countries vary widely by the share of hospital costs reimbursed through DRG payment, the presence of mandatory cost accounting and/or costing guidelines, the share of cost collecting hospitals, costing methods and data checks on reported cost data. In deciding on the share of hospital costs reimbursed through DRG payment, the presence of mandatory cost accounting and/or costing guidelines, the share of cost collecting hospitals, costing methods and data checks on reported cost data, trade-offs must be made between accuracy of the cost data and feasibility constraints. There is in general no ‘best’ cost accounting system, because the choices with regard to cost accounting must be based on the characteristics of the national health systems concerned, as well as on the objective that health policymakers want to achieve by using DRG systems. This cross-country comparison of 12 European countries may help regulatory authorities and hospital managers to identify and improve areas of weakness in their cost accounting systems and may help health policymakers to underpin the development of a cost accounting system.
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......................................................................................................... European Journal of Public Health, Vol. 24, No. 6, 1028–1033 ß The Author 2014. Published by Oxford University Press on behalf of the European Public Health Association. All rights reserved. doi:10.1093/eurpub/cku037 Advance Access published on 3 April 2014
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Direct health care costs of hospital admissions due to adverse events in the Netherlands Fabienne J. H. Magdelijns1, Patricia M. Stassen1,2,3, Coen D. A. Stehouwer1,4, Evelien Pijpers1,5 1 Division of General Medicine, Department of Internal Medicine, Maastricht University Medical Centre, Maastricht University, Maastricht, The Netherlands 2 Division of Acute Medicine, Department of Internal Medicine, Maastricht University Medical Centre, Maastricht University, Maastricht, The Netherlands 3 School of CAPHRI, Maastricht University Medical Centre, Maastricht University, Maastricht, The Netherlands 4 Cardiovascular Research Institute, Maastricht University Medical Centre, Maastricht University, Maastricht, The Netherlands 5 Section of Clinical Geriatric Medicine, Maastricht University Medical Centre, Maastricht University, Maastricht, The Netherlands Correspondence: Fabienne J. H. Magdelijns, Department of Internal Medicine, Maastricht University Medical Centre, Maastricht University, 6202 AZ Maastricht, The Netherlands, Tel: +31 (0)43 3875100, Fax: +31 (0)43 3877822, e-mail: [email protected]
Background: Health care-related adverse events (AEs) are common, and the economic burden is substantial. Information on costs of health care-related AEs ‘leading’ to hospitalization is limited and has focused on adverse drug events. Aim: To provide insight into costs of admissions due to (preventable) health care-related AEs, not limited to adverse drug events. Methods: This study was conducted during a 5-month period (May–September 2010) in the Netherlands, in a 600-bed university medical centre. All patients who were admitted via the emergency department to an internal medicine department because of a health care-related AE were included. We retrospectively retrieved all data on medical information as well as health care resource utilization from the patient’s medical record. The cost of the admission was estimated (for each patient individually) by multiplying the number of resources by their specific unit cost and then summing all costs per patient. Results: In total, 324 admissions due to a health care-related AE were included (28.7% of all admissions). Total direct health care costs of these hospitalizations amounted to E1 404 070 in a 5-month period. Medication-related AEs were most common (43.5%) and contributed most to the costs (E587 550; 41.8%). Inpatient days were most expensive (E1 076 385; 77.3%). Preventable health care-related AEs accounted for E277 665 (19.8%). Conclusion: We found that health care-related AEs are expensive, with preventable health care-related AEs accounting for one-fifth of the costs. Awareness of possible health care-related AEs following medical actions is necessary to reduce already high health care costs.
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