Health Policy Manag.  2016 Jun;26(2):135-147. 10.4332/KJHPA.2016.26.2.135.

The Effect of Mandatory Diagnosis-Related Groups Payment System

• Choi JW
• Jang SI
• Jang SY
• Kim SJ
• Park HK
• Kim TH
• Park EC

• KMID: 2326664
• DOI: http://doi.org/10.4332/KJHPA.2016.26.2.135

Abstract

BACKGROUND
The voluntary diagnosis-related groups (DRG)-based payment system was introduced in 2002 and the government mandated participation in the DRG for all hospitals from July 2013. The main purpose of this study is to examine the independent effect of mandatory participation in DRG on various outcomes of patients.
METHODS
This study collected 1,809,948 inpatient DRG data from the Health Insurance Review and Assessment database which contains medical information for all patients for the period 2007 to 2014 and examined patient outcomes such as length of stay (LOS), total medical cost, spillover, and readmission rate according to hospital size.
RESULTS
LOS of patients decreased after DRGs (large hospitals: adjusted odds ratio [aOR], 0.87; 95% confidence interval [CI], 0.78-0.97; small hospitals: aOR, 0.91; 95% CI, 0.91-0.92). The total medical cost of patients increased after DRGs (large hospitals: aOR, 1.22; 95% CI, 1.14-1.30; small hospitals: aOR, 1.22; 95% CI, 1.21-1.23). The results reveals that spillover of patients increased after DRGs (large hospitals: aOR, 1.27; 95% CI, 0.70-2.33; small hospitals: aOR, 1.18; 95% CI, 1.16-1.20). Finally, we found that readmission rates of patients decreased significantly after DRGs (large hospitals: aOR, 0.28; 95% CI, 0.26-0.29; small hospitals: aOR, 0.59; 95% CI, 0.56-0.63).
CONCLUSION
The DRG payment system compared to fee-for-service payment in South Korea may be an alternative medical price policy which can reduce the LOS. However, government need to monitor inappropriate changes such as spillover increase. Since this study also is the results based on relatively simple surgery, insurer needs to compare or review bundled payment like new DRG for expansion of various inpatient-related diseases including internal medicine.

Keyword

Diagnosis-related groups; Length of stay; Total medical costs; Spillover; Patient readmission

MeSH Terms

Diagnosis-Related Groups*
Health Facility Size
Humans
Inpatients
Insurance Carriers
Insurance, Health
Internal Medicine
Korea
Length of Stay
Odds Ratio
Patient Readmission