Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/77823
Authors: 
Vogl, Matthias
Year of Publication: 
2012
Citation: 
[Journal:] Health Economics Review [ISSN:] 2191-1991 [Publisher:] Springer [Place:] Heidelberg [Volume:] 2 [Year:] 2012 [Issue:] 15 [Pages:] 1-12
Abstract: 
The purpose of this paper is to analyze the German diagnosis related groups (G-DRG) cost accounting scheme by assessing its resource allocation at hospital level and its tariff calculation at national level. First, the paper reviews and assesses the three steps in the G-DRG resource allocation scheme at hospital level: (1) the groundwork; (2) cost-center accounting; and (3) patient-level costing. Second, the paper reviews and assesses the three steps in G-DRG national tariff calculation: (1) plausibility checks; (2) inlier calculation; and (3) the 'one hospital' approach. The assessment is based on the two main goals of G-DRG introduction: improving transparency and efficiency. A further empirical assessment attests high costing quality. The G-DRG cost accounting scheme shows high system quality in resource allocation at hospital level, with limitations concerning a managerially relevant full cost approach and limitations in terms of advanced activity-based costing at patient-level. However, the scheme has serious flaws in national tariff calculation: inlier calculation is normative, and the one hospital model causes cost bias, adjustment and representativeness issues. The G-DRG system was designed for reimbursement calculation, but developed to a standard with strategic management implications, generalized by the idea of adapting a hospital's cost structures to DRG revenues. This combination causes problems in actual hospital financing, although resource allocation is advanced at hospital level.
Subjects: 
hospital reimbursement
hospital costs
accounting
resource allocation
prospective payment system
diagnosis related groups
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by/2.0/
Document Type: 
Article

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