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Cost accounting to determine prices: How well do prices reflect costs in the German DRG-system?

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  • Jonas Schreyögg
  • Oliver Tiemann
  • Reinhard Busse

Abstract

Germany has recently introduced a system of Diagnosis Related Groups (DRGs) to engender more appropriate resource allocation. The following article describes the German DRG-system and the methodologies used to determine prices. It analyses the extent to which prices, or calculated cost weights, reflect the actual costs incurred by hospitals for their respective services. We reveal that a “compression” of DRG cost weights occurs, and that the data sample used to calculate cost weights is lacking in terms of its representativeness. Although cost data accuracy has improved over the last few years there are still a number of challenges that need to be addressed. Copyright Springer Science + Business Media, LLC 2006

Suggested Citation

  • Jonas Schreyögg & Oliver Tiemann & Reinhard Busse, 2006. "Cost accounting to determine prices: How well do prices reflect costs in the German DRG-system?," Health Care Management Science, Springer, vol. 9(3), pages 269-279, August.
    • Handle: RePEc:kap:hcarem:v:9:y:2006:i:3:p:269-279
    DOI: 10.1007/s10729-006-9094-0
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    References listed on IDEAS

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    1. M. Lungen & B. Dredge & A. Rose & C. Roebuck & E. Plamper & K. Lauterbach, 2004. "Using diagnosis-related groups," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 5(4), pages 287-289, November.
    2. Kathryn Antioch & Michael Walsh, 2004. "The risk-adjusted vision beyond casemix (DRG) funding in Australia," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 5(2), pages 115-115, May.
    3. Kathryn Antioch & Michael Walsh, 2004. "The risk-adjusted vision beyond casemix (DRG) funding in Australia," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 5(2), pages 95-109, May.
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