A large proportion of public hospital funding in Australia comes from the State and Commonwealth government. Currently, public hospitals in Victoria have been largely funded prospectively based on their casemix for inpatient as well as non-inpatient and sub-acute patient services. Casemix is a provider payment method which classifies mix types of patients, treatments as well as the associated costs. Each episode of patient care is assigned to a Diagnosis Related Group (DRG) which classifies numbers of diseases into groups which are clinically coherent and resource homogenous in terms of resource consumption and costs. DRG throughput will contribute to determining how much the hospital is paid for the patient care episode. This particular funding
…show more content…
A cost weight is applied to every assigned DRG and its allocation is based on the DRG group and Length of Stay (LOS), this creates a Weighted Inlier Equivalent Separation (WIES). Cost weight is then multiplied by the standard WIES payment. Essentially the Federal Government Department of Human Services funds the state Government roughly on the DRGs treated and then the State Government roughly divides this revenue back to its hospitals according to WEIS formulas. When hospitals receive their funding this too is usually redistributed amongst hospital services (Figure 2). WIES values are updated annually and are different between public and private hospitals, in which the value for public hospitals has been always higher than that for private hospitals. From 2012 to 2015, the WIES values for both public and private hospitals have increased approximately by 2 to 4 percent annually.
DRG codes are based on the World Health Organisation’s (WHO) International Classification of Disease 10th revision (ICD – 10) for diagnosis and ICD – 9CM for procedures. According to Victorian DRG published information, the procedure of epilepsy surgery falls under the surgical DRG code for cranial procedures with either minor, intermediate or major complexity. Assigned DRG will affect the amount of funding that the hospital receives. The detail of the recent DRG …show more content…
Health providers have to bear the costs if excessive resource utilisation occurs beyond the DRG payments. Furthermore, diverse diagnoses which are regarded similar may attract the same DRG code, thus receive the same amount of payment. However, the resource consumptions highly vary in the actual practices. As a consequence, there may be cases which are underfunded and there may be cases which generate surplus. This is particularly disadvantageous for highly-specialised and advance technology-required cases such as epilepsy surgery. In addition, the risk of wrong coding may result in inappropriate reimbursement. Furthermore, a specialised tertiary centre may attract more difficult cases including interstate and international cases, thus a gross underfunding potentially occurs if services are valued at average DRG
A cost weight is applied to every assigned DRG and its allocation is based on the DRG group and Length of Stay (LOS), this creates a Weighted Inlier Equivalent Separation (WIES). Cost weight is then multiplied by the standard WIES payment. Essentially the Federal Government Department of Human Services funds the state Government roughly on the DRGs treated and then the State Government roughly divides this revenue back to its hospitals according to WEIS formulas. When hospitals receive their funding this too is usually redistributed amongst hospital services (Figure 2). WIES values are updated annually and are different between public and private hospitals, in which the value for public hospitals has been always higher than that for private hospitals. From 2012 to 2015, the WIES values for both public and private hospitals have increased approximately by 2 to 4 percent annually.
DRG codes are based on the World Health Organisation’s (WHO) International Classification of Disease 10th revision (ICD – 10) for diagnosis and ICD – 9CM for procedures. According to Victorian DRG published information, the procedure of epilepsy surgery falls under the surgical DRG code for cranial procedures with either minor, intermediate or major complexity. Assigned DRG will affect the amount of funding that the hospital receives. The detail of the recent DRG …show more content…
Health providers have to bear the costs if excessive resource utilisation occurs beyond the DRG payments. Furthermore, diverse diagnoses which are regarded similar may attract the same DRG code, thus receive the same amount of payment. However, the resource consumptions highly vary in the actual practices. As a consequence, there may be cases which are underfunded and there may be cases which generate surplus. This is particularly disadvantageous for highly-specialised and advance technology-required cases such as epilepsy surgery. In addition, the risk of wrong coding may result in inappropriate reimbursement. Furthermore, a specialised tertiary centre may attract more difficult cases including interstate and international cases, thus a gross underfunding potentially occurs if services are valued at average DRG