Abstract
BackgroundIn 2010, Israel intensified its adoption of Procedure-Related Group (PRG) based hospital payments, a local version of DRG (Diagnosis-related group). PRGs were created for certain procedures by clinical fields such as urology, orthopedics, and ophthalmology. Non-procedural hospitalizations and other specific procedures continued to be paid for as per-diems (PD). Whether this payment reform affected inpatient activities, measured by the number of discharges and average length of stay (ALoS), is unclear.MethodsWe analyzed inpatient data provided by the Ministry of Health from all 29 public hospitals in Israel. Our observations were hospital wards for the years 2008–2015, as proxies to clinical fields. We investigated the impact of this reform at the ward level using difference-in-differences analyses among procedural wards. Those for which PRG codes were created were treatment wards, other procedural wards served as controls. We further refined the analysis of effects on each ward separately.ResultsDischarges increased more in the wards that were part of the control group than in the treatment wards as a group. However, a refined analysis of each treated ward separately reveals that discharges increased in some, but decreased in other wards. ALoS decreased more in treatment wards. Difference-in-differences results could not suggest causality between the PRG payment reform and changes in inpatient activity.ConclusionsFactors that may have hampered the effects of the reform are inadequate pricing of procedures, conflicting incentives created by other co-existing hospital-payment components, such as caps and retrospective subsidies, and the lack of resources to increase productivity. Payment reforms for health providers such as hospitals need to take into consideration the entire provider market, available resources, other – potentially conflicting – payment components, and the various parties involved and their interests.
Highlights
In 2010, Israel intensified its adoption of Procedure-Related Group (PRG) based hospital payments, a local version of Diagnosisrelated group (DRG) (Diagnosis-related group)
Since we excluded some wards from the analysis, the number of discharges is smaller than the national data reported by the Ministry of Health (MoH), ranging from 376,480 in 2008 to 410,160 in 2015, an increase of 9%; the average length of stay (ALoS) remained constant at 4.1 days
Our findings show that the trends and changes in ALoS and the number of discharges over time, in our dataset, are the same as that recorded by the MoH
Summary
In 2010, Israel intensified its adoption of Procedure-Related Group (PRG) based hospital payments, a local version of DRG (Diagnosis-related group). Israel adopted activity-based payments to replace per diems (PDs) and created codes for 30 common procedures as early as the 1990s [3]. In 2002, continuing the move towards activity-based payments, the Israeli Ministry of Health (MoH) created PRG codes for more procedures, in the same timing DRGs were introduced in some OECD countries such as Estonia, Germany and the Netherlands [6]. Hospital reimbursement rates are determined by a joint MoH and Ministry of Finance (MoF) pricing committee, stipulated in the “Price List for Ambulatory and Inpatient Services.” In 2015, 25% of the gross revenue of hospitals was for inpatient care paid as PRGs, 37% for inpatient care paid as PDs, 21% for ambulatory care paid as FFS or PRGs, 8% for births paid as PRGs, 6% for emergency care paid as FFS, and 3% from other sources such as the Ministry of Defense or the military [13]
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
