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| DRG-System | |
|---|---|
| Name | DRG-System |
| Type | Healthcare classification and payment system |
| Introduced | 1980s |
| Current status | Widely implemented internationally |
| Related | Diagnosis-related group, Prospective payment, Case mix |
DRG-System
The DRG-System groups inpatient episodes into categories for reimbursement and analysis. It intersects with hospital finance, clinical coding, and health policy across networks of insurers, ministries, and providers. Key actors include health ministries, standards bodies, and international agencies that shape adoption and adaptation.
The DRG-System organizes inpatient care into diagnosis-related groups used by Centers for Medicare and Medicaid Services, National Health Service, Institut für das Entgeltsystem im Krankenhaus, World Health Organization, and Organisation for Economic Co-operation and Development to standardize payments. Hospitals, payers, and audit bodies rely on clinical classifications such as International Classification of Diseases, Current Procedural Terminology, Systematized Nomenclature of Medicine, Healthcare Common Procedure Coding System, and International Classification of Functioning, Disability and Health to map records to DRG categories. Its use affects relations among American Hospital Association, German Hospital Federation, British Medical Association, European Commission, and national health ministries in reimbursement negotiations. Implementation engages vendors like Cerner Corporation, Epic Systems Corporation, Siemens Healthineers, Philips Healthcare, and 3M Health Information Systems.
Origins trace to research at Harvard Medical School and policy reforms in United States during the 1980s, influenced by projects at Yale University School of Medicine and modeling used by Medicare administrators. Reform episodes involved debates in the United States Congress, regulatory actions by Centers for Medicare and Medicaid Services, and academic work at Johns Hopkins University, Stanford University, Massachusetts Institute of Technology, and University of Pennsylvania. European adaptation built on pilots in Germany, France, Italy, and Sweden, with comparative studies by Organisation for Economic Co-operation and Development and technical assistance from World Bank and World Health Organization. Later methodological advances were published in journals associated with The Lancet, New England Journal of Medicine, BMJ, and Health Affairs.
The DRG-System relies on diagnostic and procedural coding standards like ICD-9, ICD-10, SNOMED CT, and Current Procedural Terminology. Classification logic was formalized by groups including All Patient Refined Diagnosis Related Groups developers and teams at 3M Health Information Systems. Grouper software from vendors and research teams at University of California, San Francisco, University College London, Karolinska Institutet, and Robert Koch Institute map codes to DRG classes. Clinical inputs draw on specialty societies such as American College of Surgeons, Royal College of Physicians, Deutsche Gesellschaft für Anästhesiologie und Intensivmedizin, and European Society of Cardiology to refine complication and comorbidity lists.
Countries adapted the DRG-System to national contexts: United States uses Medicare Severity DRGs while Germany implemented the G-DRG through Institut für das Entgeltsystem im Krankenhaus; Australia operates the Australian Refined Diagnosis Related Groups; France introduced Tarification à l'activité; Japan adopted DPC/PDPS variants; China pilots provincial DRG schemes; Canada runs provincial case-mix programs in Ontario, Quebec, and British Columbia. Regional bodies like European Commission and research networks at European Observatory on Health Systems and Policies compare national models, and professional associations including International Hospital Federation and World Medical Association engage in cross-national dialogue.
DRG-based prospective payment links to cost accounting methods taught at Harvard Business School and debated in forums like International Health Economics Association. Reimbursement calculations involve cost weights, base rates, and outlier policies developed with input from Institute for Healthcare Improvement, Kaiser Family Foundation, Organisation for Economic Co-operation and Development, and actuarial teams at firms like Deloitte, PwC, Ernst & Young, and KPMG. Economic evaluations by researchers at London School of Economics, University of Toronto, and University of Melbourne assess effects on hospital efficiency, length of stay, and resource allocation. Payment adjustments consider transfer policies in systems influenced by laws such as the Social Security Act and regulations from agencies like Centers for Medicare and Medicaid Services.
Linking DRG payment to quality metrics invokes reporting frameworks from National Quality Forum, Agency for Healthcare Research and Quality, NHS Digital, German Federal Joint Committee, and Australian Commission on Safety and Quality in Health Care. Pay-for-performance schemes tested by Medicare and private insurers use outcome indicators developed with professional bodies including American Medical Association and Royal College of Surgeons of England. Research collaborations at Johns Hopkins Bloomberg School of Public Health, Imperial College London, and University of Oxford evaluate unintended consequences and design of incentive structures alongside patient safety initiatives from Institute for Healthcare Improvement.
Critiques appear in analyses by The Lancet, BMJ, and think tanks like Brookings Institution, RAND Corporation, and Commonwealth Fund highlighting upcoding, case selection, fragmentation of care, and administrative burden. Policy disputes have arisen in legislatures such as the United States Congress and parliaments in Germany and France over tariff setting and transparency. Technical challenges include mapping across versions of International Classification of Diseases and integrating electronic health record data from vendors like Epic Systems Corporation and Cerner Corporation. Equity concerns are raised by public health researchers at Columbia University Mailman School of Public Health and Johns Hopkins University regarding impacts on vulnerable populations and rural providers.
Category:Health care payment systems