Complexity, interface management and unintended consequences of planned interventions illustrated by the DRG financing of Austrian hospitals

Abstract

This study explores scientific evidence on the repercussions of Diagnosis Related Groups (DRG) funding, a large-scale public healthcare intervention implemented in Austria's public hospital inpatient sector in the late 1990s. We investigate past and ongoing adjustments to fix unintended consequences prompted by intervention-induced staff and patient behaviour changes. The paper shows that the incentives inherent in Austrian DRG financing set off a cascade of ongoing adjustments. These seemed necessary as the behavioural patterns that emerged to bend and bypass the rules of DRG financing would have nullified the intended effects of the intervention.