IDEAS home Printed from https://ideas.repec.org/a/eee/hepoli/v120y2016i9p992-1000.html
   My bibliography  Save this article

Did hospitals respond to changes in weights of Diagnosis Related Groups in Norway between 2006 and 2013?

Author

Listed:
  • Melberg, Hans Olav
  • Beck Olsen, Camilla
  • Pedersen, Kine

Abstract

It has been argued that activity based payment systems make hospitals focus on the diagnostic groups that are most beneficial given costs and reimbursement rates. This article tests this hypothesis by exploring the relationship between changes in the reimbursement rates and changes in the number of registered treatment episodes for all diagnosis-related groups in Norway between 2006 and 2013. The number of treatment episodes can be affected by many factors and in order to isolate the effect of changes in the reimbursement system, we exclude DRGs affected by policy reforms and administrative changes. The results show that hospitals increased the number of admissions in a specific DRG four times more when the reimbursement was increased, relative to the change for DRGs with reduced rates. The direction of the result was consistent across time periods and sub-groups such as surgical vs. medical, and inpatient vs. outpatient DRGs. The effect was smaller, but remained significant after eliminating DRGs that were most likely to be affected by upcoding. Activities that the hospital had little control over, such as the number of births, had small effects, while activity levels in more discretionary categories, for instance mental diseases, were more affected. This demonstrates that contrary to the wishes of policy makers the economic incentives affect hospital reporting and priority setting behavior.

Suggested Citation

  • Melberg, Hans Olav & Beck Olsen, Camilla & Pedersen, Kine, 2016. "Did hospitals respond to changes in weights of Diagnosis Related Groups in Norway between 2006 and 2013?," Health Policy, Elsevier, vol. 120(9), pages 992-1000.
  • Handle: RePEc:eee:hepoli:v:120:y:2016:i:9:p:992-1000
    DOI: 10.1016/j.healthpol.2016.07.013
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0168851016301853
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.healthpol.2016.07.013?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Siciliani, Luigi & Hurst, Jeremy, 2005. "Tackling excessive waiting times for elective surgery: a comparative analysis of policies in 12 OECD countries," Health Policy, Elsevier, vol. 72(2), pages 201-215, May.
    2. Steinbusch, Paul J.M. & Oostenbrink, Jan B. & Zuurbier, Joost J. & Schaepkens, Frans J.M., 2007. "The risk of upcoding in casemix systems: A comparative study," Health Policy, Elsevier, vol. 81(2-3), pages 289-299, May.
    3. Martinussen, Pål E. & Hagen, Terje P., 2009. "Reimbursement systems, organisational forms and patient selection: Evidence from day surgery in Norway," Health Economics, Policy and Law, Cambridge University Press, vol. 4(2), pages 139-158, April.
    4. Bystrov, Victor & Staszewska-Bystrova, Anna & Rutkowski, Daniel & Hermanowski, Tomasz, 2015. "Effects of DRG-based hospital payment in Poland on treatment of patients with stroke," Health Policy, Elsevier, vol. 119(8), pages 1119-1125.
    5. Ellis, Randall P., 1998. "Creaming, skimping and dumping: provider competition on the intensive and extensive margins1," Journal of Health Economics, Elsevier, vol. 17(5), pages 537-555, October.
    6. Kuwabara, Hiroyo & Fushimi, Kiyohide, 2009. "The impact of a new payment system with case-mix measurement on hospital practices for breast cancer patients in Japan," Health Policy, Elsevier, vol. 92(1), pages 65-72, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kjartan Sarheim Anthun, 2022. "Predicting diagnostic coding in hospitals: individual level effects of price incentives," International Journal of Health Economics and Management, Springer, vol. 22(2), pages 129-146, June.
    2. Cook, Amanda & Averett, Susan, 2020. "Do hospitals respond to changing incentive structures? Evidence from Medicare’s 2007 DRG restructuring," Journal of Health Economics, Elsevier, vol. 73(C).
    3. Kjartan Sarheim Anthun & Johan Håkon Bjørngaard & Jon Magnussen, 2017. "Economic incentives and diagnostic coding in a public health care system," International Journal of Health Economics and Management, Springer, vol. 17(1), pages 83-101, March.
    4. Huitfeldt, Ingrid, 2021. "Hospital reimbursement and capacity constraints: Evidence from orthopedic surgeries," Health Policy, Elsevier, vol. 125(6), pages 732-738.
    5. Qian, Mengcen & Zhang, Xinyu & Chen, Yajing & Xu, Su & Ying, Xiaohua, 2021. "The pilot of a new patient classification-based payment system in China: The impact on costs, length of stay and quality," Social Science & Medicine, Elsevier, vol. 289(C).
    6. Kjøstolfsen, Gjertrud Hole & Baheerathan, Janusha & Martinussen, Pål E. & Magnussen, Jon, 2021. "Financial incentives and patient selection: Hospital physicians’ views on cream skimming and economic management focus in Norway," Health Policy, Elsevier, vol. 125(1), pages 98-103.
    7. Chien, Ling-Chen & Chou, Yiing-Jenq & Huang, Yu-Chin & Shen, Yi-Jung & Huang, Nicole, 2020. "Reducing low value services in surgical inpatients in Taiwan: Does diagnosis-related group payment work?," Health Policy, Elsevier, vol. 124(1), pages 89-96.
    8. András Kiss & Norbert Kiss & Balázs Váradi, 2023. "Do budget constraints limit access to health care? Evidence from PCI treatments in Hungary," International Journal of Health Economics and Management, Springer, vol. 23(2), pages 281-302, June.
    9. Buczak-Stec, Elżbieta & Goryński, Paweł & Nitsch-Osuch, Aneta & Kanecki, Krzysztof & Tyszko, Piotr, 2017. "The impact of introducing a new hospital financing system (DRGs) in Poland on hospitalisations for atherosclerosis: An interrupted time series analysis (2004–2012)," Health Policy, Elsevier, vol. 121(11), pages 1186-1193.
    10. Milstein, Ricarda & Schreyögg, Jonas, 2024. "The end of an era? Activity-based funding based on diagnosis-related groups: A review of payment reforms in the inpatient sector in 10 high-income countries," Health Policy, Elsevier, vol. 141(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Melberg, Hans Olav & Pedersen, Kine, 2015. "Do changes in reimbursement fees affect hospital prioritization?," HERO Online Working Paper Series 2015:1, University of Oslo, Health Economics Research Programme.
    2. David Scheller‐Kreinsen & on behalf of the EuroDRG group, 2012. "How Well Do Diagnosis‐Related Group Systems Group Breast Cancer Surgery Patients?—Evidence From 10 European Countries," Health Economics, John Wiley & Sons, Ltd., vol. 21(S2), pages 41-54, August.
    3. Buczak-Stec, Elżbieta & Goryński, Paweł & Nitsch-Osuch, Aneta & Kanecki, Krzysztof & Tyszko, Piotr, 2017. "The impact of introducing a new hospital financing system (DRGs) in Poland on hospitalisations for atherosclerosis: An interrupted time series analysis (2004–2012)," Health Policy, Elsevier, vol. 121(11), pages 1186-1193.
    4. Bertoli, Paola & Grembi, Veronica, 2017. "The political economy of diagnosis-related groups," Social Science & Medicine, Elsevier, vol. 190(C), pages 38-47.
    5. Kjøstolfsen, Gjertrud Hole & Baheerathan, Janusha & Martinussen, Pål E. & Magnussen, Jon, 2021. "Financial incentives and patient selection: Hospital physicians’ views on cream skimming and economic management focus in Norway," Health Policy, Elsevier, vol. 125(1), pages 98-103.
    6. Jurgita Januleviciute & Jan Erik Askildsen & Oddvar Kaarboe & Luigi Siciliani & Matt Sutton, 2016. "How do Hospitals Respond to Price Changes? Evidence from Norway," Health Economics, John Wiley & Sons, Ltd., vol. 25(5), pages 620-636, May.
    7. Alexander Geissler & David Scheller‐Kreinsen & Wilm Quentin & on behalf of the EuroDRG group, 2012. "Do Diagnosis‐Related Groups Appropriately Explain Variations In Costs And Length Of Stay Of Hip Replacement? A Comparative Assessment Of Drg Systems Across 10 European Countries," Health Economics, John Wiley & Sons, Ltd., vol. 21(S2), pages 103-115, August.
    8. Chiara Canta, 2021. "Efficiency, access, and the mixed delivery of health care services," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 23(3), pages 510-533, June.
    9. Yang, Ou & Chan, Marc K. & Cheng, Terence C. & Yong, Jongsay, 2020. "Cream skimming: Theory and evidence from hospital transfers and capacity utilization," Journal of Economic Behavior & Organization, Elsevier, vol. 173(C), pages 68-87.
    10. Socha, Karolina Z. & Bech, Mickael, 2011. "Physician dual practice: A review of literature," Health Policy, Elsevier, vol. 102(1), pages 1-7, September.
    11. Aoife Brick & Anne Nolan & Jacqueline O’Reilly & Samantha Smith, 2012. "Conflicting Financial Incentives in the Irish Health-Care System," The Economic and Social Review, Economic and Social Studies, vol. 43(2), pages 273-301.
    12. Sofia Dimakou & Ourania Dimakou & Henrique Basso, 2015. "Waiting time distribution in public health care: empirics and theory," Health Economics Review, Springer, vol. 5(1), pages 1-27, December.
    13. Socha, Karolina, 2010. "Physician dual practice and the public health care provision. Review of the literature," DaCHE discussion papers 2010:4, University of Southern Denmark, Dache - Danish Centre for Health Economics.
    14. Kozlowski, Dawid & Worthington, Dave, 2015. "Use of queue modelling in the analysis of elective patient treatment governed by a maximum waiting time policy," European Journal of Operational Research, Elsevier, vol. 244(1), pages 331-338.
    15. Guanshen Dou & Yilin Zhang & Yunzhen He & Qiaoyun Huang & Yingfeng Ye & Xinyu Zhang & Weibing Wang & Xiaohua Ying, 2019. "Impact of the Global Budget Payment System on Expenditure of Cardiovascular Diseases: An Interrupted Time Series Analysis in Shanghai, China," IJERPH, MDPI, vol. 16(8), pages 1-14, April.
    16. van de Vijsel, Aart R. & Engelfriet, Peter M. & Westert, Gert P., 2011. "Rendering hospital budgets volume based and open ended to reduce waiting lists: Does it work?," Health Policy, Elsevier, vol. 100(1), pages 60-70, April.
    17. Allen C. Goodman & Miron Stano, 2000. "Hmos and Health Externalities: A Local Public Good Perspective," Public Finance Review, , vol. 28(3), pages 247-269, May.
    18. Moscone, Francesco & Siciliani, Luigi & Tosetti, Elisa & Vittadini, Giorgio, 2020. "Do public and private hospitals differ in quality? Evidence from Italy," Regional Science and Urban Economics, Elsevier, vol. 83(C).
    19. Kevin E. Pflum, 2015. "Physician Incentives and Treatment Choice," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 24(4), pages 712-751, October.
    20. Barros, Pedro Pita, 2003. "Cream-skimming, incentives for efficiency and payment system," Journal of Health Economics, Elsevier, vol. 22(3), pages 419-443, May.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:hepoli:v:120:y:2016:i:9:p:992-1000. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu or the person in charge (email available below). General contact details of provider: http://www.elsevier.com/locate/healthpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.