• Health Policy and Management
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• v.10 no.4
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• pp.20-56
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• 2000

The purpose of this article was to evaluate the effects of reimbursement system on the basis of diagnosis-related groups(DRGs). We searched articles which was published from 1970 to 2000 using MEDLINE ； Key words "diagnosis-related groups, DRGs, prospective payment system, PPS. Then we reviewed 97 articles on classifying them into several categories of contents. It seems that the effects of DRGs in controlling hospitals cost in the U.S. was not clear cut. The U.S. Medicare PPS using DRGs remains vulnerable to compensatory increases in ambulatory care and long-term care facilities utilization despite cost per case and cost per admission being reduced. Also some research indicated the possibilities of deterioration in health care service quality. So putting theses results together, much more consideration is needed before the application of DRGs reimbursement system in Korea. Particularly there is the crucial difference between U.S. health care system and Korean, we must be aware of the limitations of DRGs and revise the DRG system to applicable in Korea.orea.

• Korea Journal of Hospital Management
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• v.5 no.2
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• pp.78-99
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• 2000

Objectives: The purpose of this study was to evaluate the opinions of hospital managers on DRG pilot study. Methods: Managers of 800 hospitals which had participated in DRG pilot study during the period 1997-1999, were requested to respond to structured self-administerd questionnaire. The questionnaire was composed with six categories: the motivation and satisfaction for the DRG pilot study, the opinions on the level of unit price, the appropriateness of DRG classification, the change of medical service quality during the pilot study, the patient's complains resulted from DRG system. and the opinions on the nation-wide application of DRG system. Results : Of the 800 subjects, 327(clinic, 210: 25 hospitals, 82 general hospitals, and 16 tertiary hospitals) completed the questionnaire, and the overall response rate was 41%, 121 hospitals(27%) answered that they participated in DRG pilot study because of convenience of claims and 118 hospitals(35%) dissatisfied with DRG system. 251 hospitals(85%) thought that the level of unit price under the DRG system was same as or lower than that of fee-for service. 297 hospitals(92%) responded that DRG classification should be modified and 137 hospitals(47%) experienced deterioration of medical service quality during the DRG pilot study. The 116 hospitals(35%) experienced the patient's complains resulted from DRG system. The 85 hospitals(88%) didn't want nation-wide application of DRG system. Conclusion: Most of the responded managers seemed to have negative opinions on DRG pilot study, even though they had been participated voluntarily. Further studies and extensive evaluations of DRG reimbursement system are needed before nation-wide application.

• Journal of Digital Convergence
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• v.11 no.6
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• pp.289-298
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• 2013

The objective of this study was to predict the changes in the duration of hospital stay, hospital admission fee, costs of drugs, changes in laboratory cost, material cost, total medical cost, adjusted amount of treatment and the efficacy of obstetrics and gynecology DRG system. The cost of drugs showed the greatest change and was followed by materials for medical examinations and the change in methods of medical examinations. In the analysis of the quantity of medical service the profit of medical examinations were influenced mostly by the duration of hospital stay. The results and data in this study could be used as a basis of future DRG system protocols and will be utilized so that hospitals can build a efficient medical system.

• Korea Journal of Hospital Management
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• v.7 no.1
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• pp.105-120
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• 2002

In the United States, the prospective payment system(PPS), under which diagnosis related groups (DRGs) are used to reimburse hospitals for the care of Medicare patients since 1983, Study results showed that the PPS is having a major impact on the quantity of services especially of hospital length of stay. The PPS has increased the likelihood that a patient will be discharged home in an unstable condition and the use of nursing homes or long term care facilities increased. Still, it is insufficient to conclude that the PPS has decreased the Medicare total expenditure, but relatively sufficient to conclude that the quality of care hasn't changed. The maintenance of the quality resulted from the systemic "check-and-balance" composed of three factors; (1) The doctors are reimbursed based on the fee-for-service system, (2) hospitals contact with doctors under the attending system, and (3) there are some public hospitals. In Korea, the reimbursement for hospitals and doctors are not divided, the hospitals have doctors as employees, and 90% of hospitals are private. These differences may weaken the "check-and-balance" existing in the U.S. system. And there are few long term care facilities and the diagnostic coding system using in pilot test are not suitable for Korean situation. In conclusion, for successful implementation of the DRG payment system in Korea, the government should establish the "check-and-balance" system in the health sector to make sure the quality of care before the implementation.

• Health Policy and Management
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• v.11 no.2
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• pp.29-57
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• 2001

Since the inauguration of the medical insurance system in 1977, the increasing medical expenses which can be menace to tile finance of the medical insurance system, have become major concern in the medical insurance field In Korea. This study focuses on the determinants of the medical expenses in the health insurance in Korea and analyzes the impact of these factors on the increase in the medical expenses. The empirical work is done using the pooled cross-section and time-series data of the medical insurance for the self-employeds and the industrial workers from the year 1995 to 1997. The result of this study shows that the main determinants of the medical expenses in the health insurance are the ratio of the population of the aged to the total population, the frequency of the utilization, number of doctors per capita and the regime changes. Although the increasing trend in the medical expenses seems to be unavoidable, we probably need to add some efficiency to the medical expenses by suppressing the supply and the utilization of the unnecessary medical services. The fee-for-service reimbursement system of today can't suppress the supply of the unnecessary medical services effectively. So we need to convert the present fee-for-service system into DRG's which is known to reduce the medical costs. The increase in the medical expenses comes from a lot of factors. Therefore, we should develop more systematic and comprehensive measures to control the soaring medical expenses in consideration of the various factors such as demand, supply, and the organizational side of the medical system.

• Journal of Preventive Medicine and Public Health
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• v.29 no.1 s.52
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• pp.51-65
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• 1996

The purpose of this study was to examine the trends of length of hospital stay (LOS), which is most likely to be a major attribute to hospital performance. From 1984 to 1994, an average LOS of each hospital was analyzed by factors such as medical departments, bed size, occupancy rate, region and ownership. This study was analyzed changing rate of LOS during 11 years. This rate was calculated by simple regression, which was used only with hospital without missing data during 11 years. This study findings are as follows. 1. The results indicated that the average LOS was steadily increased until 1990 but it was slightly decreased after 1990. 2. This trend could be found in all hospital scale and all group of occupancy rate. Specifically this trends of LOS were found in internal medicine, corporate owned hospitals, and hospitals in major city. But LOS of individual owned hospital was continuously increased until 1994. 3. Means of changing rates of LOS were calculated from 1984 to 1994. If we devided it into two parts, before 1990 and after 1990, most changing rates of LOS before 1990 except individual owned hospital were found positive sign. The changing rates after 1990 were negative sign but small hospital(lesser then 200 bed), individual owned hospital, national & public hospital and hospital in small urban have little change of LOS after 1990. Finally from this results we thought that most hospitals in Korea began to be concerned with LOS. Nevertheless LOS of several hospital such as small hospital or individual owned hospital was increased. And this trend may be caused by a few patients, low occupancy rate, or low profit. This trend of LOS is different from that of other countries. Perhaps this phenomenon is resulted from the reimbursement method. Because of fee for service reimbursement system in Korea the hospitals didn't need to shorten LOS in order to save the cost and increase the profit. Therefore reform of hospital cost reimbursement method will be needed to reduce hospital cost in Korea. We thought that the Korean health authority should consider the reimbursement method by unit of bundle of services, for example DRG and prepayment in the United States. This study presents some limitations such as no insight of severity of disease, case-mix measurement of hospital, and other clinical characteristics that can. possibly affect LOS. However, this study reports an important trend in LOS from 1984 to 1994.

• Journal of Preventive Medicine and Public Health
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• v.11 no.1
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• pp.123-127
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• 1978

The major objective of this research is to identify those hospital characteristics that best explain cost variation among hospitals and to formulate linear models that can predict hospital costs. Specific emphasis is placed on hospital output, that is, the identification of diagnosis related patient groups (DRGs) which are medically meaningful and demonstrate similar patterns of hospital resource consumption. A casemix index is developed based on the DRGs identified. Considering the common problems encountered in previous hospital cost research, the following study requirements are estab-lished for fulfilling the objectives of this research: 1. Selection of hospitals that exercise similar medical and fiscal practices. 2. Identification of an appropriate data collection mechanism in which demographic and medical characteristics of individual patients as well as accurate and comparable cost information can be derived. 3. Development of a patient classification system in which all the patients treated in hospitals are able to be split into mutually exclusive categories with consistent and stable patterns of resource consumption. 4. Development of a cost finding mechanism through which patient groups' costs can be made comparable across hospitals. A data set of Medicare patients prepared by the Social Security Administration was selected for the study analysis. The data set contained 27,229 record abstracts of Medicare patients discharged from all but one short-term general hospital in Connecticut during the period from January 1, 1971, to December 31, 1972. Each record abstract contained demographic and diagnostic information, as well as charges for specific medical services received. The 'AUT-OGRP System' was used to generate 198 DRGs in which the entire range of Medicare patients were split into mutually exclusive categories, each of which shows a consistent and stable pattern of resource consumption. The 'Departmental Method' was used to generate cost information for the groups of Medicare patients that would be comparable across hospitals. To fulfill the study objectives, an extensive analysis was conducted in the following areas: 1. Analysis of DRGs: in which the level of resource use of each DRG was determined, the length of stay or death rate of each DRG in relation to resource use was characterized, and underlying patterns of the relationships among DRG costs were explained. 2. Exploration of resource use profiles of hospitals; in which the magnitude of differences in the resource uses or death rates incurred in the treatment of Medicare patients among the study hospitals was explored. 3. Casemix analysis; in which four types of casemix-related indices were generated, and the significance of these indices in the explanation of hospital costs was examined. 4. Formulation of linear models to predict hospital costs of Medicare patients; in which nine independent variables (i. e., casemix index, hospital size, complexity of service, teaching activity, location, casemix-adjusted death. rate index, occupancy rate, and casemix-adjusted length of stay index) were used for determining factors in hospital costs. Results from the study analysis indicated that: 1. The system of 198 DRGs for Medicare patient classification was demonstrated not only as a strong tool for determining the pattern of hospital resource utilization of Medicare patients, but also for categorizing patients by their severity of illness. 2. The wei틴fed mean total case cost (TOTC) of the study hospitals for Medicare patients during the study years was $11,27.02 with a standard deviation of $117.20. The hospital with the highest average TOTC ($1538.15) was 2.08 times more expensive than the hospital with the lowest average TOTC ($743.45). The weighted mean per diem total cost (DTOC) of the study hospitals for Medicare patients during the sutdy years was $107.98 with a standard deviation of $15.18. The hospital with the highest average DTOC ($147.23) was 1.87 times more expensive than the hospital with the lowest average DTOC ($78.49). 3. The linear models for each of the six types of hospital costs were formulated using the casemix index and the eight other hospital variables as the determinants. These models explained variance to the extent of 68.7 percent of total case cost (TOTC), 63.5 percent of room and board cost (RMC), 66.2 percent of total ancillary service cost (TANC), 66.3 percent of per diem total cost (DTOC), 56.9 percent of per diem room and board cost (DRMC), and 65.5 percent of per diem ancillary service cost (DTANC). The casemix index alone explained approximately one half of interhospital cost variation: 59.1 percent for TOTC and 44.3 percent for DTOC. Thsee results demonstrate that the casemix index is the most importand determinant of interhospital cost variation Future research and policy implications in regard to the results of this study is envisioned in the following three areas: 1. Utilization of casemix related indices in the Medicare data systems. 2. Refinement of data for hospital cost evaluation. 3. Development of a system for reimbursement and cost control in hospitals.