The regulator is pushing the implementation of DRGs. Why?

This only applies to inpatient care in private hospitals.

Who is the regulator?

The Cooperative Council for Health Insurance (CHI) is an independent government body, that regulates private healthcare providers.

What reasons did the regulator give for implementing DRGs?

In a publication by the CHI, which you can find here, the claim the benefits of DRGs are as follows:

My opinion on the CHI’s claims of future benefits

Quality: Standardised and risk-adjusted quality measures

Agree to the first part.. As DRGs combine services into one payment, we move away from complexity. Making things simpler should always lead to standardisation. As for “risk-adjusted quality measures”, this is not my area of expertise.

Patient: Shorter LoS = safer care

Agree to the first part. In my last article, I showed that DRGs have lowered the time in hospital, according to the literature. However, Correlation does not equal causation. Fewer days in hospital does not make care safer for patients. Rather, patient safety was not impacted despite the reduction in hospital stay.

Patient: Only appropriate and necessary services results in less risks of negative side effects

Who knows. While offering fewer healthcare services means that patients are not exposed to treatment adverse effects, it is possible that patients needed that treatment or service. So, the likelihood of benefit vs the risk of harm is worth offering the treatment in some cases. Without nuance, this point is not worth exploring.

Performance: Efficient, well-coordinated service

Disagree. An efficient, well-coordinated service should have a standardized reimbursement system, but I don’t think that DRGs specifically lead to an efficient service. Any other mechanism of standardising reimbursement would serve this purpose.

Transparency: Continuous learning through transparent benchmarks and best practice

Eh? I’m not sure why this could not be done with the current billing system. Perhaps it is because it was not standardized? It feels like there is more to this than an outsider can know.

Payment: Fair and transparent resource related payment for bundles

Agree, but only for insurance companies. This benefits the insurance company. As for transparency, it is only transparent between the insurance and the hospital. What about the rest of us? I doubt payment bundles will be known to anyone outside of this circle of two.

Administration: Fair negotiation for bundles of care (DRGs) between payers/providers

Not necessarily. The DRG system takes away the previous system’s administration complexity. However, in and of itself, this does not mean negotiations will be more fair than before. For example, if, under the old system, the payer agreed to pay a specific rate for a list of services, and they were not forced into agreeing to these rates, that is a fair system. I think what the authors of this report mean here is that healthcare was over utilised and the insurance companies were paying for this excessive care. However, private hospitals were simply working under the established system, so I don’t think it was unfair.

?

To conclude, my opinion is that the benefits of the DRG system are being exaggerated in places. DRGs will definitely benefit insurance companies and reduce the rate of unneeded healthcare utilisation, which should benefit at least some patients.

?

Sources

CHI. Implementing Diagnosis Related Groups in Saudi Private Healthcare Sector. Available here. Accessed 6 Dec 2024