Hospital Financing Based on Standard Costs for Diagnosis Related Groups

Abstract

Healthcare systems are confronted with multiple challenges in the past years due to changes in the political and socio-economic international arena as well as to decreasing quality of healthcare services, decreasing population health status, lack of efficiency of the delivery system, the rigid norms and functioning of the system, lack of competition and of an active role of consumers. These have led to a growing number of healthcare facilities, with overused and outdated medical equipments, with no incentives to provide preventive care, and wide disparities between regions and socio-economic categories regarding access to and quality of hospital services. The scope of the research was to analyze actual methods of resource allocation to hospitals and to develop an improved allocation model, based on optimal costs of delivering services according to standards of actual medical practice in Romanian hospitals. The model suggests a standardization of care per types of patients (ex. Diagnostic Related Groups - DRGs) by means of developing care pathways. Once developed and implemented, care pathways may be the base for calculating the costs of „standard” care, so that they can provide a realistic image of the financial value of resources consumed in the care processes in Romanian hospitals. The model of costing care pathways offers a basis for multiple actions in the areas of financing, cost control, quality of services, adapting to international standards of care, organizational culture, patient safety and patient satisfaction. For the impact it may have on the hospital care system, the implementation of this model may be considered a bottom-up reforming of the system. Keywords: hospital financing, healthcare services costs, management accounting, care pathways, standard costs