Analysis Health Systems Perspectives

Diagnosis related groups in Europe: moving towards transparency, efficiency, and quality in hospitals?

BMJ 2013; 346 doi: (Published 07 June 2013) Cite this as: BMJ 2013;346:f3197
  1. Reinhard Busse, professor1,
  2. Alexander Geissler, research fellow1,
  3. Ain Aaviksoo, director of health policy programme2,
  4. Francesc Cots, director of management control3,
  5. Unto Häkkinen, research professor4,
  6. Conrad Kobel, research fellow5,
  7. Céu Mateus, assistant professor6,
  8. Zeynep Or, research director7,
  9. Jacqueline O’Reilly, research analyst8,
  10. Lisbeth Serdén, researcher9,
  11. Andrew Street, professor of health economics10,
  12. Siok Swan Tan, researcher11,
  13. Wilm Quentin, research fellow1
  1. 1Department of Health Care Management, Straße des 17 Juni 135, 10623 Berlin, Germany
  2. 2PRAXIS Centre for Policy Study, Tallinn, Estonia
  3. 3Parc de Salut Mar, Barcelona, Spain
  4. 4Centre for Health and Social Economics, National Institute for Health and Welfare, Helsinki, Finland
  5. 5Department of Medical Statistics, Informatics and Health Economics, Innsbruck Medical University, Innsbruck, Austria
  6. 6Escola Nacional de Saúde Pública, CMDT.LA, Universidade Nova de Lisboa, Lisbon, Portugal
  7. 7Institut de Recherche et de Documentation en Economie de la Santé, Paris, France
  8. 8Health Research and Information Division, Economic and Social Research Institute, Dublin, Ireland
  9. 9Department of Statistics, Monitoring and Evaluation, National Board of Health and Welfare, Stockholm, Sweden
  10. 10Centre for Health Economics, University of York, York, UK
  11. 11Institute for Medical Technology Assessment, Erasmus Universiteit Rotterdam, Rotterdam, Netherlands
  1. Correspondence to: W Quentin [email protected]
  • Accepted 24 April 2013

Hospitals in most European countries are paid on the basis of diagnosis related groups. Reinhard Busse and colleagues find much variation within and between systems and argue that they could be improved if countries learnt from each other

Diagnosis related groups (DRGs) were originally developed in the 1970s by researchers at Yale University.1 Their aim was to define “hospital products” and to measure what hospitals actually do.2 Medicare in the United States soon realised the potential of DRGs for paying hospitals for their work and introduced the first DRG based payment system in 1983. Since then, DRGs have spread around the world, gradually becoming the basis for paying hospitals in most industrialised countries, particularly in Europe.3 Even though hospital doctors in Europe are salaried rather than paid by DRGs, their clinical decisions largely determine the income of their hospitals and their specialist societies can influence the way DRG systems work. We recently reviewed the experience with DRG systems in 12 European countries,4 and here we compare the different systems and discuss current trends and the potential for improvement.

Why use diagnosis related groups?

European countries introduced hospital payments based on DRGs either to increase transparency or to improve efficiency.4 DRGs increase transparency because they condense the confusingly large number of individual patients treated by hospitals into a manageable number of clinically meaningful and economically homogeneous groups (for example, primary hip replacement in elective patients or transient ischaemic attack in patients under 70 without complications). By providing a definition for “hospital products” DRGs enable comparisons that would otherwise not be possible.5 For example, examining the proportion of cases in each hospital falling into more costly DRGs can help show whether one hospital treats more complex cases than another. Use of resources can be compared by assessing whether patients in the …

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