Comparing financing models for supplementary healthcare in appendectomy: activity-based costing (fee-for-service) vs. diagnosis related group remuneration (bundled payment): a systematic review and meta-analysis

Purpose: In Brazil, healthcare services traditionally follow a fee-for-service (FFS) payment system, in which each medical procedure incurs a separate charge. An alternative reimbursement with the aim of reducing costs is diagnosis related group (DRG) remuneration, in which all patient care is covered by a fixed amount. This work aimed to perform a systematic review followed by meta-analysis to assess the effectiveness of the Budled Payment for Care Improvement (BPCI) versus FFS. Methods: Our work was performed following the items of the PRISMA report. We included only observational trials, and the primary outcome assessed was the effectiveness of FFS and DRG in appendectomy considering complications. We also assessed the costs and length of hospital stay. Meta-analysis was performed with Rev Man version 5.4. Results: Out of 735 initially identified articles, six met the eligibility criteria. We demonstrated a shorter hospital stay associated with the DRG model (mean difference = 0.39; 95% confidence interval ­ 95%CI ­ 0.38­0.40; p < 0.00001; I2 = 0%), however the hospital readmission rate was higher in this model (odds ratio = 1.57; 95%CI 1.02­2.44, p = 0.04; I2 = 90%). Conclusions: This study reveals a potential decrease in the length of stay for appendectomy patients using the DRG approach. However, no significant differences were observed in other outcomes analysis between the two approaches.

Construction and application of a dynamic adjustment model of medical service price in public hospitals / 中华医院管理杂志

Constructing a scientific, standardized and reasonable dynamic adjustment model of medical service price has important reference value for the dynamic adjustment of medical service price in public hospitals. In view of the current situation at home and abroad, the authors analyzed the influencing factors of such adjustment, and constructed a dynamic adjustment model of medical service price, referring on the resource-based relative value scale theory. This model could calculate the intrinsic price of individual medical services, taking into full account the basic human resource consumption and time consumption, as well as the technical difficulty and risk degree of such services. On such basis, the economic development and price level of individual regions were integrated into the model to calculate the extrinsic price of these services. Taking the debridement(suture) service of a hospital as an example, this model was used for empirical research. It was estimated that the extrinsic price of a debridement(suture)(small) service was 54.82 yuan, that of a debridement(suture)(medium) service was 104.34 yuan, and that of a debridement(suture)(large) was 142.93 yuan. The price gap between the actual price and these estimated prices was 10.18 yuan, -26.34 yuan and -51.93 yuan respectively. This research proved that the model could be helpful to sort out the price ratio relationship and better reflect the technical labor value of medical workers.

The Impact of Casemix Reimbursement on Hospital Revenue in Indonesia (Kesan Pembayaran Casemix pada Pendapatan Hospital di Indonesia) / Jurnal Sains Kesihatan Malaysia

@#The objective of this study is to examine the impact of the casemix reimbursement on the hospital revenue at three selected hospitals (Type B, C and D) reimbursed using 602 groups from 14,749 cases. The results of the study showed that the hospitals received 32.4% higher income when reimbursed with Indonesia Case Bases Groups (INA-CBG) as compared to fee-for-service. Type D hospitals is the biggest gainer with 81.0% increased in income followed by Type B hospital that obtained 34.7% higher revenue. In conclusion, the use of INA-CBG as a prospective payment method has benefitted the hospitals by the increase in the revenues. It is hope that additional resources gained in this programme will allow the hospitals to provide optimum care to the population. It is recommended that the JKA management will use the INA-CBG casemix data to monitor the performance of the hospitals to ensure that quality and efficiency of the services provided to the population is continuously maintained.

Does the Korean Rehabilitation Patient Grouping (KRPG) for Acquired Brain Injury and Related Functional Status Reflect the Medical Expenses in Rehabilitation Hospitals?

This study identified the explanatory power of the Korean rehabilitation patient group (KRPG) v1.1 for acquired brain injury (ABI) on medical expenses in the rehabilitation hospitals and the correlation of functional outcomes with the expenses. Here, the design is a retrospective analysis from the claim data of the designated rehabilitation hospitals. Data including KRPG information with functional status and medical expenses were collected from 1 January and 31 August 2018. Reduction of variance (R2) was statistically analyzed for the explanation power of the KRPG. Association between functional status and the medical expenses was carried out using the Spearman's rank order correlation (rho). From the claim data of 365 patients with ABI, the KRPG v1.1 explained 8.6% of variance for the total medical expenses and also explained 9.8% of variance for the rehabilitation therapy costs. Cognitive function and spasticity showed very weak correlation with the total medical expenses (rho = −0.17 and −0.14, respectively). Motor power and performance of activities of daily living were associated weakly (rho = −0.27 and −0.30, respectively). The KRPG and related functional status in ABI reflects the total medical expenses and rehabilitation therapy costs insufficiently in the designated rehabilitation hospitals. Thus, the current KRPG algorithm and variables for ABI may need to be ameliorated in the future.

The Calculation of Geographic Practice Cost Index and the Feasibility of Using It in Korean Payment System / 보건행정학회지

The fee-for-service system is used as the main payment system for health care providers in Korea. It has been argued that it can't reflect differences in the medical practice costs across regions because the fee schedule is calculated based on the average cost. So, some researchers and providers have disputed that there is need for adopting geographic practice cost index (GPCI) used in the United States for the Medicare program for the elderly to the fee-for-service payment system. This study performed to identify whether the difference in the practice costs among regions exists or not and to examine the feasibility of applying GPCI to Korea payment system. For this purpose, we calculated modified-GPCI and examined considerations to introduce GPCI in Korea. First we identified available data to calculate GPCI. Second, we made applicable GPCI equations to Korea payment system and computed it based on four types of regions (metropolitan, urban, suburban, and rural). We also categorize the regions based on the availability of the medical resources and the capability of utilizing them. As a result, we found that there wasn't any significant difference in the GPCI by regional types in general, but the indices of rural areas (0.91–0.98) was relatively low compared to the indices of other regions (0.96–1.07). Considering the need to use GPCI floor, the pros and cons of using GPCI, and the concern of the regional imbalance of resources, the introduction of GPCI needs to be carefully considered.

Changes in the Medical Cost and Practice Pattern according to the Implementation of per Diem Payment in Hospice Palliative Care / 보건행정학회지

BACKGROUND: As of July 2015, per diem payment was changed from fee for service Therefore, this study aims to analyse changes in medical charges and medical services before and after enforcement of the palliative care, targeting palliative care wards in a general hospital, and provide basic data needed for development of per diem payment. METHODS: The subjects of the study were a total of 610 cases consisting of 351 patients of service fee who left hospital (died) from July 2014 to June 2016 and 259 ones of per diem payment at Chosun University Hospital in Gwangju Metropolitan City. RESULTS: The results are summarized as follows. First, after the palliative care system was applied, benefit medical service charges and insurance increased significantly (p<0.001). As benefit medical service charges increased, benefit private insurance payment increased significantly (p<0.001). Second, after the per diem payment was applied, total private insurance payment to medical institutes decreased significantly (p=0.050) and non-benefit also decreased significantly (p=0.001). CONCLUSION: It is suggested that additional rewards in the obligatory palliative care items should be continuously remedied and monitored to provide good quality hospice palliative care.

Study about Economic Adequacy of Tonsillectomy and Adenoidectomy Based on Medical Prime Costs / 대한이비인후과학회지

BACKGROUND AND OBJECTIVES: The Korean National Health Insurance is based on 'fee for service' system, but recently 7 groups of diseases were forcibly applied to diagnosis related groups (DRG) system. In these 7 group of diseases, tonsillectomy and adenoidectomy were included in the otorhinolaryngology field. The objective of this research is to estimate the invested medical costs, profit and loss, and improvement points for the disease groups according to DRG and 'fee for service' system. SUBJECTS AND METHOD: We investigated 1,377 subjects who underwent tonsillectomy and adenoidectomy based on DRG between January 2011 to December 2013 at our hospital. The profit and loss of medical costs were calculated according to medical record data, medical service fee, and activity based costing (ABC). RESULTS: The total of 1,377 subject comprised of 905 patients younger than 17 years-old and 472 patients older than 18 years-old. A main moderate complication that was not one of the DRG diseases, postoperative bleeding, was only found in 19 patients (1.38%). Profit related to tonsillectomy and adenoidectomy studied for a 3 year-period was higher in the DRG system than in the 'fee for service' system; however, profit was reported as 62.9-67.5% of the actual prime costs. CONCLUSION: DRG system for tonsillectomy and adenoidectomy seems to have higher compensation rate than the 'fee for service' system does. However, the system is still insufficient to compare profit with the input medical cost. Furthermore, the present system of disease grouping needs to be improved to reflect actual medical prime costs.

Refinement and Evaluation of Korean Outpatient Groups for Visits with Multiple Procedures and Chemotherapy, and Medical Visit Indicators / 보건행정학회지

BACKGROUND: Issues concerning with the classification accuracy of Korean Outpatient Groups (KOPGs) have been raised by providers and researchers. The KOPG is an outpatient classification system used to measure casemix of outpatient visits and to adjust provider risk in charges by the Health Insurance Review & Assessment Service in managing insurance payments. The objective of this study were to refine KOPGs to improve the classification accuracy and to evaluate the refinement. METHODS: We refined the rules used to classify visits with multiple procedures, newly defined chemotherapy drug groups, and modified the medical visit indicators through reviews of other classification systems, data analyses, and consultations with experts. We assessed the improvement by measuring % of variation in case charges reduced by KOPGs and the refined system, Enhanced KOPGs (EKOPGs). We used claims data submitted by providers to the HIRA during the year 2012 in both refinement and evaluation. RESULTS: EKOPGs explicitly allowed additional payments for multiple procedures with exceptions of packaging of routine ancillary services and consolidation of related significant procedures, and discounts ranging from 30% to 70% were defined in additional payments. Thirteen chemotherapy drug KOPGs were added and medical visit indicators were streamlined to include codes for consultation fees for outpatient visits. The % of variance reduction achieved by EKOPGs was 48% for all patients whereas the figure was 40% for KOPGs, and the improvement was larger in data from tertiary and general hospitals than in data from clinics. CONCLUSION: A significant improvement in the performance of the KOPG was achieved by refining payments for visits with multiple procedures, defining groups for visits with chemotherapy, and revising medical visit indicators.

Payment reform for the improvement of primary care in Korea

Strengthening primary care has always been a major policy issue in most developed countries to achieve the health care system's goals, and policy makers continuously try to use payment system as an effective tool to improve overall performance of primary care. In this paper, we examined the various payment methods and growing trends in primary care payment system in some developed countries. Overall, a common form of payment for primary care doctors is a blend of fee-for-service (FFS), capitation, and pay-for-performance (P4P). In addition, many countries are still in the way of many new trials to find the right way to provide primary care service effectively, to meet the complex health care needs of populations. In Korea, primary care system is not well-established, and other institutional arrangements are not in good conditions for primary care, either. FFS, which is a dominant payment method in Korea, is not favorable for achieving good attributes of primary care. Mixing various payment components, like capitation, P4P to current FFS is essential to provide the optimal incentive structures for primary care physicians. Also, new models to encourage doctor-patient relationships with appropriate P4P mechanisms could be used as an early step in reforming primary care payment system gradually.

Forecasting the Future Reimbursement System of Korean National Health Insurance: A Contemplation Focusing on Global Budget and Neo-KDRG-Based Payment Systems

With the adoption of national health insurance in 1977, Korea has been utilizing fee-for-service payment with contract-based healthcare reimbursement system in 2000. Under the system, fee-for-service reimbursement has been accused of augmenting national healthcare expenditure by excessively increasing service volume. The researcher examined in this paper two major alternatives including diagnosis related group-based payment and global budget to contemplate the future of reimbursement system of Korean national health insurance. Various literature and preceding studies on pilot project and actual implementation of Neo-KDRG were reviewed. As a result, DRG-based payment was effective for healthcare cost control but low in administrative efficiency. Global budget may be adequate for cost control and improving the quality of healthcare and administrative efficiency. However, many healthcare providers disagree that excess care arising from fee-for-service payment alone has led to financial deterioration of national health insurance and healthcare institutions should take responsibility with global budget payment as an appropriate solution. Dissimilar payment systems may be applied to different types of institutions to reflect their unique attributes, and this process can be achieved step-by-step. Developing public sphere among the stakeholders and striving for consensus shall be kept as collateral to attain the desirable reimbursement system in the future.

Case-Payment System in Vascular Surgery / 대한혈관외과학회지

Medical insurance, which is mandatory in Korea, has been progressed in the way of expanding the relevant population and intensifying the guarantee. However, rapid increases in medical expenses led national health insurance into a state of financial crisis. The government considered the reason of financial crisis as fee-for-service and started reorganizing the terms of payment from fee-for-service to case-payment. Therefore, an expanded diagnosis related group (DRG) payment system is carried out to decrease the expense on health and to secure financial stability. At the same time, the new case-payment system, apposite to the medical case in Korean society, is under demonstration. DRG payment system is in execution for the 7 disease entities of the four departments requested for now. However, it is supposed to be carried out in all the hospitals from the second half of 2012 and be expanded to all the general hospitals from 2013. The new case-payment system is under development because it is difficult to apply DRG to all disease entities. These shake-ups in the payment system will be conducted from the year 2015, combining both the DRG and new case-payment system. Basically, the introduction of the new case-payment system will cause doctors' passive attitude in the treatment of patients. This would be an especially serious problem for the department of surgery whose charge for operation is very low. It would be worse for the vascular surgeons because only 80% of operational or interventional procedures will be compensated, the fee for ultrasound is included in the new case-payment system, and age-related severity is not reflected in the disease entity. If relaunch is inevitable, vascular surgeons should understand the new case-payment system exactly and point out the problems. Also, standard guidelines on treatment per procedure should be set up and used for the established case-payment system, which would be helpful in reducing unnecessary medical expenses.

Impacto de la selección de los mecanismos de pago en la producción de atención de salud: ¿están en línea con los objetivos sanitarios? / Impact of payment mechanisms on health services production in Chile: are the mechanisms in tune with the health policy objectives?

Este trabajo intenta caracterizar de los problemas que contienen los incentivos, principalmente aquellos contenidos en los mecanismos de transferencia usados en Chile, que no se encuentran a la altura de los desafíos de la actual reforma, por lo que se requiere entrar en una fase de modificación importante. A la vez, se describe evidencia empírica que muestra efectos indeseados sobre la producción de prestaciones a nivel global, desde hace algunos años y desde 2005, con la implementación de la reforma y la introducción de las GES, asociados a los mecanismos de pago. Esto es, disminución general de la actividad del SNSS, aumento de las urgencias y de la compra externa tanto vía MLE como GES. La disminución de la actividad general del SNSS no implica una caída en la productividad ya que se produce un cambio en el case-mix de producción del sistema, incentivado por las GES y sus compromisos asociados. Esto último, puede estar reflejando problemas de acceso en lo no GES. Por último, se reseña de modo general, la propuesta que está siendo trabajada en el sector para modificar los sistemas de transferencia.

The current mechanisms of financial transfer in the Chilean Health Care System imply incentives that are not up to the challenges of the Health Reform initiated in 2002. According to the authors, important modifications are required. We present empirical evidence of the undesired effects of those mechanisms on the overall generation of health services in the last few years. Starting in 2005, the Health Reform introduced Explicit Guarantees (GES) for the Provision of certain services, and these are linked to the mechanisms of payment to the providers. There has been a general decrease in the activities of the National Health Services System, an increase of emergency care and in the purchase of external services via the Explicit Guarantees and also via the Free Choice option included in the public system. The reduction of the general activity of the public system is not matched by a fall in productivity: what we observe is a change in the case mix, which is induced mainly by the Explicit Guarantees scheme and its associated commitments. A reduction of access to non GES care may be under way. We describe the general outline of a proposed change in the financial transfer mechanisms, which is being discussed in the health sector.

Home-based Hospice-palliative Care Service Administered by University-based Family Practice

BACKGROUND: Systematic care is not well provided in patients with terminal cancer and their families in Korea. Unnecessary hospitalization, multiple emergency room visits for controlling acute symptoms and the use of unqualified alternative care services are typical health care utilization patterns in such patients. We operated home-based hospice-palliative care services to help these patients and their families at a university-based family practice setting. Our experience is presented for the development of care model of hospice-palliative care services. METHODS: We investigated the demographic characteristics, the clinical findings and the utilization of medical care services of 72 terminally ill cancer patients before and after enrollment to hospice-palliative care unit from April 25, 2003 to April 21, 2005. RESULTS: The frequency of emergency room visits and the number of hospitalizations were decreased by Wicoxon Signed Ranks Test after the enrollment to home-based hospice-palliative care service unit. The duration of emergency room visits decreased from 7.7 hours to 0.3 hours and the duration of hospitalization decreased from 6.5 days to 0.0 days in median. The cost per emergency room visits decreased from 268,801 won to 153,816 won and the cost per hospitalization decreased from 285,491 won to 106,294 won in median. CONCLUSION: Home-based hospice-palliative care services can be an efficient and effective model for the care of terminally ill cancer patients at a low cost.