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Social policy and professional self-interest: Physician responses to DRGS

Author

Listed:
  • Notman, Mark
  • Howe, Kenneth R.
  • Rittenberg, William
  • Bridgham, Robert
  • Holmes, Margaret M.
  • Rovner, David R.

Abstract

Prospective hospital reimbursement based on Diagnosis Related Groups (DRGs) began in 1983 for Medicare patients, and many states are adopting similar systems for Medicaid recipients in an attempt to curb rising health care costs. Because of their unprecedented intrusiveness compared to previous cost-containment measures and because they explicitly introduce financial incentives to reduce services, DRGs have great potential to affect health care delivery. To determine the effects of DRGs on hospitals and physicians, six months of ethnographic fieldwork was carried out on the medicine and pediatrics services of a university-affiliated hospital during the first year of DRG-based reimbursement. Observations and interviews were used to discern institutional responses to DRGs and physician knowledge of, experience with, and reactions to this cost-containment effort. Our findings indicate that the hospital instituted many changes to protect its interests. Data gathered from patients' abstracts suggest providers are successfully dealing with the new system; the average length of stay for Medicare patients was reduced by 38% in the first year of prospective reimbursement, compared with a 15% reduction for other patients (P

Suggested Citation

  • Notman, Mark & Howe, Kenneth R. & Rittenberg, William & Bridgham, Robert & Holmes, Margaret M. & Rovner, David R., 1987. "Social policy and professional self-interest: Physician responses to DRGS," Social Science & Medicine, Elsevier, vol. 25(12), pages 1259-1267, January.
    • Handle: RePEc:eee:socmed:v:25:y:1987:i:12:p:1259-1267
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    Cited by:

    1. Chilingerian, Jon A., 1995. "Evaluating physician efficiency in hospitals: A multivariate analysis of best practices," European Journal of Operational Research, Elsevier, vol. 80(3), pages 548-574, February.
    2. Baxter, Pamela E. & Hewko, Sarah J. & Pfaff, Kathryn A. & Cleghorn, Laura & Cunningham, Barbara J. & Elston, Dawn & Cummings, Greta G., 2015. "Leaders’ experiences and perceptions implementing activity-based funding and pay-for-performance hospital funding models: A systematic review," Health Policy, Elsevier, vol. 119(8), pages 1096-1110.

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