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Economic incentives and diagnostic coding in a public health care system

Author

Listed:
  • Kjartan Sarheim Anthun

    (NTNU, Norwegian University of Science and Technology
    SINTEF Technology and Society)

  • Johan Håkon Bjørngaard

    (NTNU, Norwegian University of Science and Technology
    St. Olav’s University Hospital Trondheim)

  • Jon Magnussen

    (NTNU, Norwegian University of Science and Technology)

Abstract

We analysed the association between economic incentives and diagnostic coding practice in the Norwegian public health care system. Data included 3,180,578 hospital discharges in Norway covering the period 1999–2008. For reimbursement purposes, all discharges are grouped in diagnosis-related groups (DRGs). We examined pairs of DRGs where the addition of one or more specific diagnoses places the patient in a complicated rather than an uncomplicated group, yielding higher reimbursement. The economic incentive was measured as the potential gain in income by coding a patient as complicated, and we analysed the association between this gain and the share of complicated discharges within the DRG pairs. Using multilevel linear regression modelling, we estimated both differences between hospitals for each DRG pair and changes within hospitals for each DRG pair over time. Over the whole period, a one-DRG-point difference in price was associated with an increased share of complicated discharges of 14.2 (95 % confidence interval [CI] 11.2–17.2) percentage points. However, a one-DRG-point change in prices between years was only associated with a 0.4 (95 % CI $$-1.1$$ - 1.1 to 1.8) percentage point change of discharges into the most complicated diagnostic category. Although there was a strong increase in complicated discharges over time, this was not as closely related to price changes as expected.

Suggested Citation

  • 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.
    • Handle: RePEc:kap:ijhcfe:v:17:y:2017:i:1:d:10.1007_s10754-016-9201-9
    DOI: 10.1007/s10754-016-9201-9
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    2. 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.
    3. 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).
    4. Carine Milcent, 2024. "Bias due to re-used databases: Coding in hospital for extremely vulnerable patients," PSE-Ecole d'économie de Paris (Postprint) hal-03960584, HAL.
    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.

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    More about this item

    Keywords

    Case-mix; DRG; DRG creep; Funding; Hospitals; Financing;
    All these keywords.

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • I10 - Health, Education, and Welfare - - Health - - - General

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