DRG implementation in Estonian health care model –

hospital perspective

Teele Orgse

4th Nordic Casemix Conference

June 4th 2010 Helsinki

The Republic of Estonia

• Parliamentary republic, president elected for 5 years (Mr. Toomas Hendrik Ilves)

• Official language – Estonian• Coastline – 3794 km with 1521 islands• Total area – 45 227 km2 • Population – 1 370 000 (Estonians 65%,

Russians 28%, Ukrainians 3%, Belorussians 1%, Finns 1%, other 2%)

• Independent since 24.02.1918, occupied by the Soviet Union 1940, regained the independence on 20.08.1991. Member of the European Union since May 1st 2004.

• We have been here since 6500 BC!

Background – Soviet heritage

• Centralized

• state-controlled

• over-capacitated provider network (120 hospitals with 18 000 beds)

• Polyclinics

• budget financed

Background - reforms• Began in the end of 1980s• Economic collapse, high inflation and political

clutter – the aim was:– to improve the efficiency and quality of health care

system

– to meet the needs of a small country and its population

• Decentralization of primary and hospital care to local administrative level

• Elimination of special systems• Separation of powers• January 1st 1992: Health Insurance Law

– From tax-based to insurance-based

• Hospital network reorganization• Health care providers – operating under

private law

Hospital Master Plan

Regionalism

Golden Circle

Financing

Earmarked payroll tax

13%66%

Central government

9%

Municipalities1%

Co-payment21%

Others3%

ContractingNeed

assessment

Quarterlyassessment

Designing ofbudget Contracting

4-year financialprognosis

The most cost-efficient system in Europe because of the contracting system. The supreme winner in the 2007 and 2008 BFB (bang-for-the-buck) scores (Euro Health Consumer Index 2008 report).

Contract

Health care services list

• Calculated by the EHIF, consulted with specialists and hospitals

• Over 130 pages

• Lists every

detailed service

– coded + priced

The BILL

• Fee-for-service:– Service + service + service = € € €

• Hospitals analyse and manage contracts

• Capped contracts

DRG-s in Estonia

• Implemented in 2004

• There were a few articles about what DRGs are (Habicht)

• Some presentations

• “Somehow infiltrated”

• Starting from 10%/90% to 70%/30% today

The BILL

• Fee-for-service:– Service + service + service = € € €

• Hospitals analyse and manage contracts

• Capped contracts

• Bill = services 30% +DRG price 70%

Conclusion?

• Confusion

• Loss of transparency

Hospital “study”• 2 hospitals regularly analyze the impact of

DRGs• 1 hospital uses special program – Datawell

Visual DRG Pro• 7 years after implementation basic

calculation principles still need to be introduced

• EHIF finances over 90% of the hospital budget– Pärnu Hospital 10,2 M € (45%)– 70% 7,1M €

Correcting

• Is labour with suturation still labour or is it a complication?

• Is a chronically ill heart failure patient a heart failure patient or a patient with heart rhytm problems?

• Is stenocardia the main problem or is morbus ischaemicus cordis?

Classification

• Official guidelines:– Gynecology and obstetrics 2005– Hematology 2006

• ICD-10– Doctors education– “Most resourceful diagnose”

• Better statistics if dealth with

Case study - Pärnu Hospital

• Around 15 000 bills that concern DRG– 2 300 don’t classify– Over 50% of bills are covered by

22 DRGs

Are prices fair?

2005 – 2006 101%

2006 – 2007 101%

2007 – 2008 119%

2008 – 2009 101%

2009 - 2010 101%

DRG 182

• 2006-2010 DRG billing in infectious diseases department always negative

• DRG 182 one of the most usual (1-3)• 01.01.2010– 21.05.2010 42 cases

- negative financial aspect 44 710 EEK- negative 19- positive 23

• Negative in cases with over 5 days admission

DRG 225

• 2006-2010 DRG billing in orthopedics department always negative

• DRG 225 one of the most usual (4-5)• 01.01.2010– 21.05.2010 16cases

- negative financial aspect 29 269 EEK- negative 13 - positive 3

• Negative in higher class operations

Conclusion• DRGs are part of hospital

financing system

• Hospitals don’t have resources or will or know-how or a reason to analyze

• Made the system less transparent

• There is so much information that could be used and we are moving towards that

Tervist!