EURO DRG PROJECT: CROSS-COUNTRY COMPARISON FOR BETTER INTEGRATION

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1 EURO DRG PROJECT: CROSS-COUNTRY COMPARISON FOR BETTER INTEGRATION Thomas RENAUD, EuroDRG Project-IRDES Josselin THUILLIEZ, EuroDRG Project-CNRS Brussels, September 2012

2 Introduction

3 Hospital financing: European countries moved (from global budget) towards activity-based payment Incentivizing performance, transparency, benchmarking and efficiency (Un)intended consequences on quality of care, innovation, coding 3

4 Understand, describe and assess the ability of DRGs to represent hospital activity and to base payment 12 countries accross Europe Analysis of DRGbased hospital payment 4

5 Hospital activity (inpatients in acute care here) Similarities between countries: Common principles to classify patients and casemix use of DRGs (Diagnosis-Related Groups) Activity-based payment systems Differences: Hospitals (size, organisation, public/private ) Purchasers 5

6 Why DRGs and DRG-based payment? To get a common currency of hospital activity for : Transparency (performance measurement) Efficiency (and benchmarking across hospitals) Budget allocation (or division among purchasers) Planning of capacities Payment 6

7 DRGs & Resource use in Europe

8 DRGs first introduced in Portugal in 1984 Most countries introduced DRGs during the 90s 8

9 From 1 to 10 years between introduction of DRGs and introduction of DRG-based budget allocation Different systems of DRGs across countries (except Nord-DRGs for all Nordic countries) Different levels of refinement and detail: Number of groups: from 500 (Poland) to 2300 (France) Revision and updates of classification: annual or biennal in most countries 9

10 DRG algorithms: Differ across countries Commonly based on treatment, patient and providers characteristics Sequentially organized classification Particular attention to severity, complications and comorbidities (Require routine data collection) 10

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17 Country 17

18 1. Do some national DRGs systems systematically perform better than others? 2. Is there a need for refinement of classifications? If so, which additional patient/clinical characteristics should be taken into account? 3. Is more DRGs better? 4. Is there room for a common DRG classification and a commonly based payment system across Europe? Require an empirical/quantitative analysis 18

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20 Quantitative Analysis

21 1. To identify individual factors (patient and treatment characteristics ) that explain variation in resource use across patients 2. To assess the explanatory power of DRGs relative to these individual factors 3. To assess relative hospital performance in managing resources and the characteristics of hospitals that explain this performance 21

22 Routinely collected at individual level (each stay) On all hospitals or on a sample of them (5 countries) Collection of characteristics on: Treatment: diseases (ICD10) and procedures (variety of classifications) Patient: age, gender, SES, geographic status Resource use: length of stay, cost, medical units Some discrepancies in data collection between countries 22

23 Percent of Patients Percent of Patients Analysis of routine patientlevel data Costs or Length of stay for patients having particular Episode of Care (EoC) Diagnostic and treatment details for all these patients Log of Cost: Appendectomy (France) Log of Cost ( ) Length of Stay: Appendectomy (France) Analysis of the hospitals in which patients are treated Length of Stay (Days) 23

24 Year 2008 (for most countries) Core characteristics for patients and treatment across countries: No SES for example Few common hospitals characteristics 10 Episodes of Care : Appendectomy, Breast cancer, Hip replacement, knee replacement Identified through main diagnosis (ICD-10) and procedures (ICD9-CM or national classifications) 24

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26 Why do some patients have different costs than others? Are DRGs better than our patient-level variables? 26

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28 Why the average cost in one hospital higher than another? 28

29 Age and gender Type of admission (emergency) Whether transferred to/from hospital Counts of diagnoses & procedures Charlson and other comorbidities OECD patient safety indicators Urinary tract and wound infections Discharged dead or alive Description AGE N % 1-10 years ,25% years ,41% years ,46% years ,62% 36 + years ,27% Description DRGs N % 06C091 - Appendectomy uncomplicated, level ,66% 06C081 - Appendectomy complicated, level ,73% 06C092 - Appendectomy uncomplicated, level ,10% 06C082 - Appendectomy complicated, level ,70% 06C083 - Appendectomy complicated, level ,15% All other DRGs 166 1,67% Diag and Proc N % Asthma DV (DV 1 = yes 0 = no) 119 1,20% Hypertension DV (DV 1 = yes 0 = no) 269 2,70% Laparoscopy planned (done or failed) DV (DV 1 = yes 0 = no) ,44% Cdifficile DV (DV 1 = yes 0 = no) 1 0,01% Obesity DV (DV 1 = yes 0 = no) 210 2,11% Diag and Proc Mean SD Min Max N Count of diagnoses 1,56 1, Count of procedures 2,55 1,

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35 Complementary not substitute way to evaluate DRG systems No single national DRG dominates clearly Generally DRGs have good explanatory power Variation also driven by patient characteristics Large variation in resource use among hospitals: scope for better utilisation of resources. 35

36 Conclusions & Discussion

37 Capacity of DRGs to explain costs varies significantly across countries and EoCs Using a high number of DRGs does not always improve resources description: scope for refinement but not necessarily for more groups In some countries DRGs compensate generously for adverse events which are due to bad care quality 37

38 Trade-off exists between encouraging certain technological innovations and the efficiency incentives of DRG-based hospital payment Most countries have specific short-term payment instruments targeted at encouraging the adoption and use of technological innovations. All countries update their DRG-based hospital payment systems but: the frequency of updates and the time lag to the data used for updates differ greatly 38

39 Short-term payment instruments should be used very carefully, and granted only after careful assessments of the likely effects of the concerned technology on quality of care. Increase European cooperation in HTA Use Coverage with Evidence Development if uncertain about effects Long-term updating mechanisms should assure that DRG systems are as up-to-date as possible: Increase European cooperation in HTA DRG systems can be updated more frequently than is currently the case in some countries The time-lag to data used for updates could be shortened in several countries 39

40 Important differences in national coding and accounting practices e.g. recording of secondary diagnoses No-one knows the true costs of treatment! Should there be a EuroDRG system? What is the variation in medical practice? Great similarities in underlying architecture and data! Local ownership Availability of a strong information system for monitoring quality & efficiency (wide gaps between countries) 40

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