Managerial workarounds in three European DRG systems.

Rod Sheaff,Naomi Chambers,Verdiana Morando,Richard Byng,Ann Mahon,Mark Exworthy,Russell Mannion

doi:10.1108/jhom-10-2019-0295

Abstract

Attempts to transform health systems have in many countries involved starting to pay healthcare providers through a DRG system, but that has involved managerial workarounds. Managerial workarounds have seldom been analysed. This paper does so by extending and modifying existing knowledge of the causes and character of clinical and IT workarounds, to produce a conceptualisation of the managerial workaround. It further develops and revises this conceptualisation by comparing the practical management, at both provider and purchaser levels, of hospital DRG payment systems in England, Germany and Italy. We make a qualitative test of our initial assumptions about the antecedents, character and consequences of managerial workarounds by comparing them with a systematic comparison of case studies of the DRG hospital payment systems in England, Germany and Italy. The data collection through key informant interviews (N=154), analysis of policy documents (N=111) and an action learning set, began in 2010-12, with additional data collection from key informants and administrative documents continuing in 2018-19 to supplement and update our findings. Managers in all three countries developed very similar workarounds to contain healthcare costs to payers. To weaken DRG incentives to increase hospital activity, managers agreed to lower DRG payments for episodes of care above an agreed case-load 'ceiling' and reduced payments by less than the full DRG amounts when activity fell below an agreed 'floor' volume. Empirically this study is limited to three OECD health systems, but since our findings come from both Bismarckian (social-insurance) and Beveridge (tax-financed) systems, they are likely to be more widely applicable. In many countries, DRGs coexist with non-DRG or pre-DRG systems, so these findings may also reflect a specific, perhaps transient, stage in DRG-system development. Probably there are also other kinds of managerial workaround, yet to be researched. Doing so would doubtlessly refine and nuance the conceptualisation of the 'managerial workaround' still further. In the case of DRGs, the managerial workarounds were instances of 'constructive deviance' which enabled payers to reduce the adverse financial consequences, for them, arising from DRG incentives. The understanding of apparent failures or part-failures to transform a health system can be made more nuanced, balanced and diagnostic by using the concept of the 'managerial workaround'. Managerial workarounds also appear outside the health sector, so the present analysis of managerial workarounds may also have application to understanding attempts to transform such sectors as education, social care and environmental protection. So far as we are aware, no other study presents and tests the concept of a 'managerial workaround'. Pervasive, non-trivial managerial workarounds may be symptoms of mismatched policy objectives, or that existing health system structures cannot realise current policy objectives; but the workarounds themselves may also contain solutions to these problems.

Highlights

1.1 The prototype: work-process workarounds Workarounds are the ways in which individual workers or work groups informally by-pass or alter the ways in which a formalised work process is executed, so that they can fulfil its task in another way (Halbesleben et al, 2008)
We aimed to elicit which practices, including workarounds, for implementing Diagnostic Related Group (DRG) were specific to one particular health system and which were common to all three likely to reflect the nature of DRG systems per se
The German DRG system reimburses the running costs of inpatient care but Land governments remain responsible for hospital investment, each hospital’s bed allocation

Summary

Introduction

1.1 The prototype: work-process workarounds Workarounds are the ways in which individual workers or work groups informally by-pass or alter the ways in which a formalised work process is executed, so that they can fulfil its task in another way (Halbesleben et al, 2008). Workarounds, adjust them further, beyond officially prescribed boundaries, to create informal, unauthorised improvisations that replace official rules and work processes with alternatives that the improviser thinks are more effective or practicable. Often workarounds emerge as improvised repairs of ill-designed, incomplete, impracticable, over-restrictive or otherwise dysfunctional work processes (Bar-Lev, 2015; Vogelsmeier et al, 2008) which make complex tasks still more difficult (De Bono et al, 2013). Workarounds are responses to organisational problems (Lalley and Malloch, 2010) (e.g. inter-professional or inter- European DRG departmental boundaries, role ambiguity), practical inadequacies of new technologies (Coiera, 2007), over-work (Guedon et al, 2017), inflexible rules or communication blockages systems (De Bono et al, 2013)

Objectives

Methods

Results

Conclusion