Hospital financing reform and case-mix measurement: an international review

Health Care Financing Review, Summer, 1992 by Miriam M. Wiley

In 1985, the Council of Europe undertook a study on The Computerisation of Medical Data in Hospital Services, Including University Hospitals (Rodrigues et al., 1988). This study involved a review of the status of hospital activity and cost data, coding practices, and case-mix measures under investigation for use in Europe. At that time, 11 countries in Europe reported experimenting with DRGs at some level, though at the time all but 1 of these countries had to translate locally used morbidity codes into International Classification of Diseases, 9th Revision, Clinical Modification (ICD-9-CM) to test DRGs on national data. Two countries, Netherlands and England, reported that projects were being supported aimed at developing a local DRG system.

A number of research initiatives have been supported by the European Community (EC), including a concerted action on "The Use of Diagnosis Related Groups to Support Hospital Sector Management in the European Community (EURODRG, 1989-92)" and a number of exploratory actions within the "Advanced Informatics in Medicine (AIM) program, 1989-91." A new concerted action under the AIM program on "Case-Mix Applications for Resource Management" is currently at the planning stage. Essentially, these concerted actions provide resources for the coordination of research activities and findings between EC member States undertaking research on case-mix related issues.

The World Health Organization (WHO) has also been active in this area. WHO supported the investigation of options for systems of payment by type of service or patient and applications of DRGs to hospital budgeting and performance measurement (Leidl, 1990). More recently, WHO has taken the initiative in supporting research for case-mix variations in ambulatory surgery in the European region (Wiley and Devereux, 1992).

It is clear therefore, from this short overview, that the activities of international organizations active in the European context have been maintained and expanded since their initiation in the mid-1980s. The fact that these activities facilitate cross-national cooperation and collaboration in the investigation of areas of common interest has also, in turn, helped to advance local and national initiatives. It is to an examination of these national investigations and developments that we now turn.

Financing reforms: An international review

Our task here is to attempt a synthesis of work in progress in selected European countries and Australia towards the development of case-mix-based applications within the respective health care systems. The inclusion of countries in this review is primarily determined on the basis of a stated or implicit objective of developing case-mix-based applications for financing and/or resource management purposes within the acute hospital sector. Although many countries are still at the point of considering a range of options before making a commitment to a particular policy direction, the inclusion of a report on "work in progress" here is not intended to prejudge the outcome of the decisionmaking process. Rather, it is hoped to provide an account of a range of issues that have assumed priority status internationally as many countries face similar problems in attempting to curtail health budgets while safeguarding access and ensuring the availability of high quality care. The countries included in the review which follows are Australia, Belgium, England, France, Ireland, Norway, Portugal, Spain, Sweden, and the United States.