Comparing the financial risk of bed-day and DRG based pricing types using parametric and simulation methods.
The extent of random financial risk involved in the Finnish bed-day and Diagnosis Related Groups (DRG) based hospital pricing systems were estimated and compared using parametric and simulation methods. DRG based payment schemes were found to provide significantly better protection against financial risk for municipalities, but municipality's size was the main determinant of financial risk. Small municipalities should use longer contracts between hospitals or form bigger purchaser-organisations for risk pooling. In addition, the current risk management system proved to be ineffective in decreasing the random variation in total costs.
Mikkola
Hennamari
H
National R&D Centre for Welfare and Health, Helsinki, Finland. Hennamari.Mikkola@stakes.fi
Sund
Reijo
R
Linna
Miika
M
Häkkinen
Unto
U
D019985:Benchmarking; D003361:Cost Allocation; D003627:Data Interpretation, Statistical; D003953:Diagnosis-Related Groups / Q000191:economics*; D005380:Financing, Government; D005387:Finland; D006302:Health Services Research; D017721:Hospital Costs / Q000145:classification / Q000706:statistics & numerical data*; D006767:Hospitals, District / Q000191:economics*; D006801:Humans; D009111:Local Government; D017059:Models, Econometric; D011907:Rate Setting and Review / Q000145:classification / Q000706:statistics & numerical data*; D012051:Reimbursement Mechanisms; D020414:Risk Sharing, Financial