Adjusting the Costing/Pricing Systems of Public Health Units in Times of Emergency Health Crises: The Case of Greece

Abstract

The aim of this research was to examine the costing / payment system applicable to public hospitals in the period before Covid-19 and compare it with adjustments implemented by the Greek Government because of Covid-19, both in payment methods and in the execution of its budgets. In addition, we tried to record the burden on hospitals with the extra costs caused by Covid-19 and how these affected the regular execution of their budget. Quantitative data were collected from a university hospital, which is one of 13 coronavirus reference centers in Greece. Data were collected from the Finance, Supply and Revenue pricing departments. All Greek hospitals have adopted Closed Consolidated Hospitalization – Diagnosis Related Groups (KEN- DRGs) as the pricing system, based on the Australian DRGs. The findings revealed that, due to the inability of the KEN system to readily adjust to a health crisis and due to a lack of time to adapt to the new circumstances, Greek hospitals were called to implement a per-diem reimbursement system as a Covid-19 case pricing system. It was also found that the hospital, in order to keep providing its services for Covid-19 patients at the same pace, was required to incur a large amount of expenses. According to the results, the reimbursement system of public hospitals in no way reflects the actual Covid-19 costs and a reliable cost accounting system for calculating the actual cost per Covid-19 patient (based on actual costs and hospitalization data) is needed. Additionally, there is an evident and urgent need for optimization of the KEN system and its evolution into a more reliable costing/pricing system, such as that of the DRGs.
 Keywords: health costing, Public Health Units, Diagnosis Related Groups (DRGs), budget, health economics, coronavirus (Covid-19)