Abstract
Activity-based financing of Norwegian hospitals was implemented in 1997. An earlier study shows that when the activity-based component increases, the average length of stay for the elderly is reduced. If this reduction entails premature discharge, an increased activity-based component may have the undesirable side effect of increasing readmission rates. Yearly the Norwegian government decides the size of the activity-based component, and all hospitals face the same size. In this paper, we investigate whether the level of activity-based financing is associated with the readmission rates for acute-care patients above 70 years of age. The sample consisted of 468 010 hospital admissions among elderly patients in the period from 2000 to 2007. Using repeated cross-sectional data extracted from the Norwegian Patient Registry, a Cox regression model was used to estimate factors that may influence the hazard rate of a readmission within 30 days. The overall 30-day readmission rate was 6.6%. The results demonstrate that the activity-based component had no significant effect on the readmission rate. Patient-specific factors such as age, gender, diagnoses, comorbidities, as well as the time trend, were important predictors of readmission rates. We also found a statistically significant random effect of hospitals, although this effect was less substantial than the impact of patient characteristics. Our results show that the effect of the activity-based component on the readmission rate was negligible when it varied between 40% and 60%.Published: Online May 2016. In print August 2016.
Highlights
Since July 1, 1997, Norwegian hospitals have had a mixed prospective financing system consisting of a risk-adjusted capitation component and an activity-based component (ABF)
The ABF component, based on diagnosis-related groups (DRGs), has established economic incentives related to resource use (Epstein et al, 1991; Brownell et al, 1999; Yin et al, 2013)
The data used in the study was taken from the Norwegian Patient Registry (NPR) and includes individual patient data from 52 acute hospitals in Norway from 2000 to 2007
Summary
Since July 1, 1997, Norwegian hospitals have had a mixed prospective financing system consisting of a risk-adjusted capitation component and an activity-based component (ABF). The ABF component, based on diagnosis-related groups (DRGs), has established economic incentives related to resource use (Epstein et al, 1991; Brownell et al, 1999; Yin et al, 2013). 72-81 to discharge patients prematurely, leading to increased rates of readmissions (Stern and Epstein, 1985; Petersen, 2010; Lindman et al, 2012), which according to the literature are proposed to be an important indicator of patient health outcome and healthcare system performance (Anderson and Steinberg, 1984; WHO, 2005; Jencks et al, 2009; Yam et al, 2010). A recent systematic literature which searched 34 studies published from 1966 to 2010 in the MEDLINE and EMBASE databases (van Walraven et al, 2011) reported that the median proportion of readmissions deemed avoidable was 27.1%, but varied from 5% to 79%
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