Abstract
BackgroundIn 2013–2014, Israel accelerated adoption of activity-based payments to hospitals. While the effects of such payments on patient length of stay (LoS) have been examined in several countries, there have been few analyses of incentive effects in the Israeli context of capped reimbursements and stretched resources.MethodsWe examined administrative data from the Israel Ministry of Health for 14 procedures from 2005 to 2016 in all not-for-profit hospitals (97% of the acute care beds). Survival analyses using a Weibull distribution allowed us to examine the non-negative and right-skewed data. We opted for a Bayesian approach to estimate relative change in LoS.ResultsLoS declined in 7 of 14 procedures analyzed, notably, in 6 out of 7 urological procedures. In these procedures, reduction in LoS ranged between 11% and 20%. The estimation results for the control variables are mixed and do not indicate a clear pattern of association with LoS.ConclusionsThe decrease in LoS freed resources to treat other patients, which may have resulted in reduced waiting times. It may have been more feasible to reduce LoS for urological procedures since these had relatively long LoS. Policymakers should pay attention to the effects of decreases in LoS on quality of care. Stretched hospital resources, capped reimbursements, retrospective subsidies and underpriced procedures may have limited hospitals' ability to reduce LoS for other procedures where no decrease occurred (e.g., general surgery).
Highlights
In 2013–2014, Israel accelerated adoption of activity-based payments to hospitals
The present study evaluated whether the Israeli local variant of DRGs, the Procedure related group (PRGs), that groups patients by procedure, caused similar effects as in England, Austria and Poland, or whether local context led to different outcomes
Increases in length of stay (LoS) in one procedure may be offset by decreases in another. To address this potential limitation, we examined the impact of PRG-based payments on average LoS at the procedure level
Summary
In 2013–2014, Israel accelerated adoption of activity-based payments to hospitals. Payments to health providers are used by policymakers to achieve health system objectives. Policymakers pursue multiple objectives, such as increasing technical efficiency (reducing costs without undermining quality or increase productivity without increasing costs but maintaining quality), incentivizing providers to admit and treat patients based on need, and providing high quality care, while controlling expenditures. Since 1980s, the United States and other high-income countries shifted to activity-based payments such as DRGs as hospital payment mechanisms. The aim was to achieve a more appropriate and equitable allocation of resources and increase transparency by better measurement of activity, once payment was tied to activity [3]. DRGs incentivize increasing the number of cases, reducing the cost per patient, and reducing (avoidable) costs.
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