How does DRG-funding affect quality - seen from the patient’s perspective

1. How does DRG-funding affect quality -seen from the patient’s perspective Anni Ankjær-Jensen Danish Rheumatism Association Nordic Casemix Conference Helsinki June 3, 2010

2. About the Danish Rheumatism Association • A private patient organisation • Indepedent from commercial and political interests • 74.000 members • 500 volunteers working for the cause nationwide • A major contributor to research in rheumatology in Denmark (11 mio. D.kr. in 2009)

3. Will try to answer the following questions: • How is quality defined viewed from the patient perspective? • How could DRG-payment conflict with quality? • What is the evidence? • How should hospitals be financed in order to support quality?

4. Quality of care –viewed from the patient perspective • The best clinical quality of the entire treatment • Timely admission to care, efficient treatment episodes, and diagnostic evaluations with no unnecessary waiting time • Integrated and coordinated care • Information, communication, education and participation – patients and relatives • Respectfull treatment by the staff • Equal access

5. HowcouldDRG-paymentconflictwithquality?

6. DRG-funding implies: • The hospital/department budget depends on the number of patients treated • The hospital is payed a fixed price per patient irrespective of the actual treatment cost

7. This could give the hospitals an incentive to react in the following way:

8. DRG-payment may also lead to: • Cream scimming • Dumping • Negative effect on equity • Suboptimising (”kassetænkning”) • Negative effect on coordination/integration

9. DRG-payment also implies: • Production is rewarded- not other dimensions of hospital activity, such as quality • Less attention on other dimensions • Number of treated patients are rewarded - not other outputs from the hospital such as prevention, coorporation with the primary sector and education of young doctors • Less attention on other outputs

10. Summary- expected consequences for patient experienced quality of care

11. What is the evidence?

12. Experiences from the USA • In 1983 Health Care Financing Administration changed the way hospitals were reimbursed for medicare and medicaidpatients • Study of the proces of care before and after introduction of the DRG-based prospective payment (Kahn et. al. Jama 1990:264) • Included 14,012 patients hospitalized before and after implementation of PPS • Process of care improved after introduction of PPS • Increased likelihood that the patient will be discharged from the hospital in an unstable condition

13. Experiences from Norway • ”Stykprisforsøget” 1991-1994 • 2 studies of the effect on quality (Petterson1995): • No change in hospital incurred infections • No change in the treatment of patient with AMI • ”Indsatstyret finansiering” 1997 – • Report from the public auditor (Oslo 2002): • No negative effects on quality in the form of unnecessary admissions, stability when discharged, reduction in intensity of treatment, readmission, mortality, and patient satisfaction

14. Experiences from Sweeden • ”Beställer utfører” programs in a number of counties 1990 – • ”The Stockholm model” • Interview with physicians employed at clinics with DRG (Svenson, Garelius 1994) • 30% said that the quality had deteriorated • Interview with physicians employed at clinics with DRG, and physicians in clinics without DRG (Forsberg m.fl. 2000) • More phycisians at DRG hospitals find that quality has deteriorated

15. Experiences from Sweeden (2) • Gävleborg County • Quality of care before and after the introduction af DRG, reported by patients (Ljungreen og Sjoden 2001, 2003) • A decreased satisfaction with the possibility to ask questions,treatment by staff at the ward on arrival and when discharged • No change in quality of life after discharge

16. Experiences from Denmark • ”Takststyring” 2004- • Evaluation. Interview with physicians (Ankjær-Jensen 2005) • No negative effects on quality (”we will not compromise on quality”) • Exampels of suboptimising, lack of cooporation between different clinics, who will take the overall responsibility for the patient? • Exampels of physicians prioritizing patients who are expected to use their right to free choice of hospital at the expence of patients who are not expected to use their right to free choice of hospital

17. Summary on evidence

18. Howcould Hospital payment support quality?

19. Pay for performance in the USA (P4P) • 50 % of all managed care organisations in the USA have implemented P4P programs • Hospitals are rewarded if they reach certain predefined quality indicators • Ex: Number of patients admitted with AMI, that: • Ordinated aspirin at admission and when discharged • Are advised on smoking cessation • Die at the hospital • Timely acces to care • Doctor patient communication • Patient satisfaction

20. Adverse effects of P4P • Quality indicators are based on available evidence/ can be measured • Areas/patient groups where no indicators have been deveolped or where little research is being done may be overlooked

21. Are phycisians motivated by money? • What motivates physicians and nurses? • Recognition/rewards from colleagues (professionalism) • Implementation of new treatments • Treatment of many patients • Money, however not money itsef, but to be able to implement new treatments/ to educate and be educated

22. Conclusion • Financial incentives only work on rewarded items • Risk of less attention on other aspects of the hospital activity • If you want to improve/secure quality, you can not rely on financial incentives. Instead you should focus on • Education • Information • Feed back systems

23. Thank you for your attention