An Evaluation of Diagnosis-Related Group (DRG) Implementation Focused on Cancer DRGs in Greek Public Hospitals

Abstract

Objectives: The main aims of this study were to evaluate the Greek version of the diagnosis-related group reimbursement system (KEN-DRG) and to compare the KEN-DRG prices with the average actual cost of each group of study cases. Along with other aspects, the differences between the KEN-DRG average length of stay (ALOS) and the actual ALOS was evaluated in selected cases. Methods: In the first part of this study, the top-down costing approach was selected in order to break down the total operating costs of the hospital, by hospital department. The aim of this stage was identification of the total operating costs and the average cost per patient day for each Internal Medicine Department of the ‘Hippokration’ General Hospital of Athens during the period 2014–2015. The final cost drivers were identified using the concept of cluster-related incidents in the hospital. In a subsequent stage, the 13 most frequent cancer KEN-DRG prices charged by Internal Medicine Departments were selected as a sample for further data analysis. Results: With regard to the costing of the oncological KEN-DRG, the present study illustrates that a majority of the current reimbursement rates for oncological KEN-DRG codes are under-reimbursed, taking into account the actual costs of hospitalization for each group of cases. The results also reveal that the ALOS of the KEN-DRG does not reflect the actual ALOS in the sample of cases examined. In addition, under the scope of this study, two proposed models for the KEN-DRG price recalculation were developed, based on the average estimated cost of hospitalization for the sample incidents, which could improve the existing reimbursement system for Greek hospitals in the medium term. Conclusions: The KEN-DRG payment system that was implemented in Greece for the first time in 2012 needs redesigning in terms of the true cost of hospital services and the actual cost of each patient’s treatment. With regard to the existing KEN-DRG reimbursement system, the current study suggested the use of a DRG price calculation model that consists of a relative weight factor and a base price, based on a real cost calculation process on an annual basis. Moreover, it should be stressed that the present study, as well as other related studies, make it possible to know the actual cost of hospitalization, and can contribute to the creation of a cost database over time at the level of hospitals or specific clinical departments.