Fischer: A Comparison of PCS Construction Principles of the American DRGs, the Austrian LDF System, and the German FP/SE System.

Z I M - Paper 15th PCS/E Odense Sept. 1999
Last update: 31.01.2000


A Comparison of PCS Construction Principles
of the American DRGs, the Austrian LDF System, and the German FP/SE System

Wolfram Fischer

Zentrum für Informatik und wirtschaftliche Medizin
CH-9116 Wolfertswil SG (Switzerland)
http://www.fischer-zim.ch/


In: Proceedings of the 15th PCS/E International Working Conference. Odense 1999.

Contents :
 •  Abstract
 •  Introduction
 •  Methods/Material
 •  Results
 •  Evaluation
 •  Conclusions
 •  References
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ABSTRACT

INTRODUCTION
DRG systems are the best-known PCSs.

In some countries one of the DRG systems was adapted; other countries preferred to build new systems using similar construction principles.

METHODS/MATERIAL
For an expert opinion - commissioned by the German Hospital Association - the DRG systems HCFA-DRG, AP-DRG and APR-DRG were compared with the two German-language PCSs: the Austrian LDF system and the German system of "Fallpauschalen" and "Sonderentgelte" (FP/SE: Flat Case Rates and Special Fees for O.R. procedures).
RESULTS
Construction principles
Although DRG systems present a one-dimensional structure with a simple hierarchy, their construction actually involves multiple hierarchies. The LDF system uses a two-dimensional approach with diagnosis groups for hospital cases and ICU groups for ICU days. The structure of the FP/SE system is also two-dimensional. -
The use of doctors' criteria alone and the use of main diagnoses in all systems weakens the homogeneity of the resulting groups throughout. A further important source of inhomogeneity are blurred definitions of "hospital case".
Contents
While DRGs and LDFs cover the whole spectrum of acute care inpatient patients, FP/SE cover only a part of all hospital cases. - While LDFs are nearer to ICD codes and therefore more easily understandable, DRGs have found a more sophisticated way of dealing with multimorbidity. - None of the systems is really capable of reflecting clinical severity.
Cost weights and further figures . . .
... such as average length of stay (ALOS) or trim points should be developed from scratch in each individual country.
CONCLUSIONS
  • The use of doctors' criteria alone, the requirement of main diagnoses, and the lack of an adequate definition of the term "hospital case" result in a lack of homogeneity.  
     
  • PCSs do not  have to be adapted as a whole. Whereas it can be useful to adapt the PCS groups and perhaps some algorithms to calculate figures (such as weights or trim points), it is problematic to take over the figures themselves.  
     
  • The use of a PCS also requires the creation of a whole set of surrounding components of the remuneration system.

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INTRODUCTION

DRG systems [1] [2] have won the competition as the most widely accepted and best-known PCS. There are three developments which can be observed (cf. also: http:// www.fischer-zim.ch / notes-en / PCS-in-Europe-9810.htm):

  1. Many countries have created adaptations of one of the DRG systems.
  2. 3M, the producer of DRG systems, has itself developed several variants of DRG systems.
  3. In some countries, newly built systems which use similar construction principles have evolved.

The development of DRG systems began at Yale University (R. Fetter) in the USA in the late 1980s in competition with other systems such as D.S. and PMC. The first aim was to use this patient classification system (PCS) for quality assurance. Medicare, the government health insurance of elderly, which is administered by HCFA, began to use DRGs as part of a prospective payment system in 1983. Other insurance companies called for patient groups for all types of patients, which entailed the development of AP-DRGs and APR-DRGs by 3M, and RDRGs by the group of R. Fetter. In 1994, HCFA published SR-DRGs as a refined version of HCFA-DRGs. Major comorbidities and complications (MCCs) were introduced at DRG level. This system has not been used for remuneration so far because it has been feared that it would cause payment shifts between the hospitals (cf. table 1).

At this 1999 PCS/E conference in Odense, 3M presented the IAP-DRG system (International All Patient Diagnosis Related Groups), which will be finished by the end of 1999. It is an abridged version of the APR-DRG system: It has 3 CC levels (instead of 4) and a total number of 1,046 groups.  
 

Abb.: The Extended Family of DRG Systems

Table 1: The Extended Family of DRG Systems
(Figures = Year of first implementation)

 
 

In Austria, DRGs were evaluated from 1985 to 1987. In 1997, a home-grown PCS called LDF1 was introduced throughout the whole country as part of a remuneration system named LKF.2 The first approaches towards these systems began in 1988. In 1995 and 1996, pilot trials were conducted in two provinces (in Vorarlberg and in Lower Austria). The LDF system is revised each year. The third version of LDFs for 1999 defines 848 LDFs. The cost weights date from the case calculations of 1989, 1991 and 1993. A revision of the calculation of the cost weights is imminent. [3]


1 LDF = performance-related diagnostic case groups ("Leistungsbezogene Diagnose-Fallgruppen").

2 LKF = performance-oriented financing of hospitals ("Leistungsorientierte Krankenanstalten-Finanzierung").

In Germany, DRGs were evaluated and rejected in 1986. It was found that multimorbidity and severity were not adequately considered and that the variance displayed when using groups from the 3 first digits of ICD-9 was more or less the same as with DRGs. Then, PMCs were translated and evaluated by Prof. G. Neubauer. [4] [5] In 1995, the German-developed system of "Fallpauschalen" and "Sonderentgelte" ("FP/SE": Flat Case Rates and Special Fees) was introduced by the government. With 94 FPs and 146 SEs, only a part of all hospital cases are covered. In 1998, the decision-making was delegated to the umbrella associations of insurers and of hospitals. (This is called "self-administration".) The discussion now focuses on the alternatives of either the further development of the FP/SE system or the introduction or adaptation of one of the DRG systems, or the introduction of the Austrian LDF system.

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METHODS/MATERIAL

In this paper, the author presents the main themes of a book of his which contains the revision and extension of an expert opinion commissioned by the German Hospital Association. [6] The DRG systems HCFA-DRG, AP-DRG and APR-DRG are compared with the two German-language PCSs: the Austrian LDF system, which has been newly developed [3] and the German system of "Fallpauschalen" and "Sonderentgelte" (FP/SE: Flat Case Rates and Special Fees). [7] [8]

A comparison grid was developed which includes the main points which should be discussed in an evaluation of patient classification systems. It was structured according to the following items:

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RESULTS

PCS construction principles

Dimensionality
Although DRG systems present a one-dimensional structure with a simple hierarchy, their construction actually involves multiple hierarchies. A special case is the MCC concept of AP-DRGs, which causes problems when grouping results of this system are to be compared to results of one of the other DRG systems (cf. table 2-4).

The LDF system shows a more consistent hierarchical structure. Beyond, it uses the classification of treatment in intensive care units (ICUs) as a second dimension of LDF (cf. table 5).

The FP/SE also has two dimensions. They are used for the main treatment and - in case of surgical treatment - for additional operation room procedures (cf. table 6).

 
 
 Table: Hierarchical levels of HCFA-DRGs

Table 2: Hierarchical Levels of HCFA-DRGs

 
 
 
 

 Table: Hierarchical levels of AP-DRGs

Table 3: Hierarchical Levels of AP-DRGs

 
 
 
 

 Table: Hierarchical levels of APR-DRGs

Table 4: Hierarchical Levels of APR-DRGs

 
 
 
 

 Table: Hierarchical levels of the Austrian LDF System

Table 5: Hierarchical Levels of the Austrian LDF System

 
 
 
 

 Table: Hierarchical levels of the German FP/SE system

Table 6: Hierarchical Levels of the German FP/SE System

 
 

Classification criteria
The use of doctors' criteria alone and the use of main diagnoses in all systems weakens the homogeneity of the resulting groups throughout (cf. tables 7 to 12).

To point out the importance of additional criteria, we can have a look at other settings: it makes no sense, for instance, to define minimal datasets which contain only diagnoses in settings like rehabilitation, geriatry or psychiatry. In acute care, there are always elderly people or people with disabilities, which results in higher costs. Therefore it is essential to ask about the reasons for inhomogeneity in acute care, too.

The LDF system uses an ICU score per day based on TISS as additional classification criterion. For this criterion, a second grouping dimension was constructed (cf. table 3 above).

The FP/SE system uses some discharge types for cardiac and orthopaedic cases as grouping criteria:

In the FP/SE system, different cost weights are used according to whether a patient is treated by a hospital doctor or by a doctor from outside the hospital who only uses its infrastructure. (The costs of doctors are included in the German Flat Case Rates, in contrast to the American way where cost weights are calculated without doctors' costs.)

None of the systems uses information about treatment goals.

 
 
Variant ICD-9-CM Main Diagnosis Secondary Diagnosis Additional Secondary Diagnosis
(a) 250.00 Diabetes m. Pneumonia Septicaemia
(b) 486 Pneumonia Diabetes m. Septicaemia
(c) 038.9 Septicaemia Pneumonia Diabetes m.

Table 7: Coding Choices of an Example Case [9]

 
 
 
 

Variant MDC HCFA-DRG Cost Weight HCFA-DRG Label AP-DRG Cost Weight AP-DRG Label
(a) 10 294 (0.75) Diabetes
Age > 35
566 (2.62) Endocrine, Nutritional and Metabolic Disorder Except Eating Disorder or CF with Major CC
(b) 4 89 (1.19) Simple Pneumonia and Pleurisy
Age > 17
with CC
541 (2.46) Respiratory Disorder except Infections, Bronchitis, Asthma with Major CC
(c) 18 416 (1.53) Septicaemia
Age > 17
584 (3.98) Septicaemia with Major CC

Table 8: DRGs and Cost Weights of the Example Case

 
 
 
 

Variant LDF Points Label of LDF FP/SE
(a) HDG 18.05 A (28,779) Diseases of the Pancreas -
(b) HDG 05.03 B (44,499) Pneumonia and Bronchiolitis with Bronchoscopy -
HDG 05.03 C (35,298) Pneumonia and Bronchiolitis without Bronchoscopy Age > 69
(c) HDG 16.05 B (41,403) Complicated Bacterial Infection with Main Diagnoses 038 (Septicaemia) -

Table 9: LDF and FP/SE Groups of the Example Case

 
 
 
 

HCFA-DRG Cost Weights 0.75 1.19 1.53
(a) (b) (c)
DRG 294 0.75 (a)   159% 204%
DRG 89 1.19 (b) 63%   129%
DRG 416 1.53 (c) 49% 78%  

Table 10: HCFA-DRG Cost Weight Proportions

 
 
 
 

AP-DRG Cost Weights 2.62 2.46 3.98
(a) (b) (c)
DRG 566 2.62 (a)   94% 152%
DRG 541 2.46 (b) 107%   162%
DRG 584 3.96 (c) 66% 62%  

Table 11: AP-DRG Cost Weight Proportions

 
 
 
 

LDF Cost Weights 28,779 44,499 35,298 41,403
(a) (b1) (b2) (c)
HDG 18.05 A 28,779 (a)   155% 123% 144%
HDG 05.03 B 44,499 (b1) 65%   79% 93%
HDG 05.03 C 35,298 (b2) 82% 126%   117%
HDG 16.05 B 41,403 (c) 70% 107% 85%  

Table 12: LDF Cost Weight Proportions

 
 

Temporal units
While the definition of "hospital case" does not seem to be an explicit part of DRG systems, there are some first trials to cover this important subject in the FP/SE system: some groups are split according to treatment phases defined by the type of discharge (as mentioned above).

But instead of the integration of this temporal dimension into the hierarchy of the PCS groups, it would be more flexible to create a separate dimension for it.

PCS contents

Coverage
All DRG systems (with 500 to 1500 groups) and the LDF system (with 863 LDFs) cover the whole spectrum of acute care inpatient patients.

The FP/SE system (with 94 FPs and 146 SEs) covers only part of all hospital cases. In 1996, 34% of the inpatient cases were remunerated through flat case rates (i.e. 21% of inpatient days or 23% of turnover). In some fields, higher proportions were achieved; for instance, 80% in cardiac surgery.

Clinical Homogeneity
LDFs are defined rather straightforwardly by the ICD codes. Therefore they are more easily understandable than DRGs, which are defined by decision trees. DRGs have found a more sophisticated way of dealing with multimorbidity when splitting case groups into subgroups with and without CCs (comorbidities or complications) and/or MCCs (Major CCs).

None of the systems is really capable of reflecting clinical severity of the illness. (Multimorbidity is only one facet of severity.) The information needed is already lacking in the minimal data set that is used.

It would be interesting to conduct the following test: doctors who have worked with a PCS for a sufficiently long period of time should classify their patients without using the grouper software. The difference between manual grouping and grouping by software would show the degree to which patient groups correspond with clinical thinking.

Cost weights and further figures

As I showed at a previous PCS/E conference, cost weights and further figures such as average length of stay (ALOS) or trim points are rather specific for each individual country. [10]

It is recommended that "figures components" of any PCS which was developed abroad should not be adopted.

Integrating a PCS into a remuneration system

A PCS is not a remuneration system. Many additional components have to be defined (cf. table 13):

The Austrian hospital financing system LKF, of which LDF is a part, is a good example to show which elements have to be defined for the integration into a remuneration system.

 
 
Remuneration System
for Inpatient Treatment

 
 
Setting:
- inpatient treatment
- inpatient+outpatient
- treatment episodes (inpat.+amb.)
- . . .
Funding Model:
- one/more financial sources
- budgeting/caps
- with/without deficit compensation
- . . .
 
R e m u n e r a t i o n   M o d e l
 
Health Care Product Types:
- treatment
- others
Scope of Regulations:
- nation
- region
- group of hospitals
- one hospital
Payment Components:
- basic payments
- modifications
 
 
 
" P r i c e   L i s t "
 
Product Description Prices
Service Bundles:
- patient
   categories
Units:
- "case"
Characteristics:
- ??
Figures:
- cost weights
- length of stays
- trimpoints
Payments:
- fixed payments
   per case
- outlier payments
 
PCS Constructions Principles
 
 
 
Calculations Methods
(cost weights, length of stays, ...)
 

Table 13: General Remuneration System for "Inpatient Treatment"

 
 

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EVALUATION

In the table 14, several aspects of PCSs are compared. The following scale was used: 1 = bad, 2 = unsatisfactory, 3 = moderate, 4 = good, 5 = very good.  
 
Construction FP/SE LDF HCFA-DRG SR-DRG AP-DRG APR-DRG
Separability of the PCS elements: grouping structure / algorithms to calculate figures (e.g. cost weights) / value of the figures 5 5 5 5 5 5
Clear hierarchies / possibilities for aggregations 3- -4 3-4 -4 2-3 4
Multimorbidity 1-2 2 2-3 3 3 -4
Possibility of constructing clinical pathways 4 3-4 3 3-4 -3 3-4
Transparency of the building process of the groups 5 4-5 3 3 3 2
Adequate definition of the "case" 2 1 1 1 1 1
Contents FP/SE LDF HCFA-DRG SR-DRG AP-DRG APR-DRG
Applicability in acute inpatient care 4 4 4 4 4 4
Applicability to other settings 1 1-2 1 1 1 1
Completeness 2 5 5 5 5 5
Degree of graduation 4 3 3 3-4 3-4 4
Clinical homogeneity 3-4 3-4 2-3 2-3 2-3 3-4
Homogeneity of costs 3-4? 2-3? 2-3 3 3 3-4
Application FP/SE LDF HCFA-DRG SR-DRG AP-DRG APR-DRG
Error tolerance related to coding variants 1 2 3 3 3 3
Error tolerance related to incomplete coding 5 4 3 2-3 2-3 2
Acceptance of doctors 3-4 3-4 3 3-4 3-4 4-5
Acceptance of nurses 2 2 2 2 2 2
Acceptance of economists 3 4 4-5 4 4 3-4
Maintenance secured 2 3-4 5 1 4-5 3-4
Possibilities of utilisation FP/SE LDF HCFA-DRG SR-DRG AP-DRG APR-DRG
Calculation of costs of cases 4 3 3 3-4 3-4 4
Remuneration 3-4 4 4 4 4 3-4
Business management 2 4 4 4 4 4
Clinical management 3 4 3 4 4 4-5
Performance declaration 2 5 5 5 5 5
Benchmarking 2-3 3-4 3-4 4 4 4-5
Performance contracts 1 4 4 4 4 4-5
Planning of hospitals 2 5 5 4 4 4
Epidemiological research 2 3 3 3 3 3-4

Table 14: Comparative PCS Evaluation

 
 

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CONCLUSIONS

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REFERENCES

[1] Fetter RB, Brand A, Dianne G [Eds.]: DRGs, Their Design and Development. Health Administration Press, Ann Arbor 1991: 341 pp.

[2] Averill RF, Muldoon JH, Vertrees JC, Goldfield NI, Mullin RL, Fineran EC, Zhang MZ, Steinbeck B, Grant T: The Evolution of Case Mix Measurement Using Diagnosis Related Groups (DRGs). 3M HIS Working Paper 5-98. Wallingford 1998 (3M): 40 pp.

[3] BMAGS-A: Bundesministerium für Arbeit, Gesundheit und Soziales: Leistungsorientierte Krankenanstaltenfinanzierung - LKF - Modell 1999. Wien 1998 (BMAGS): 28 pp.
Internet: http:// www.bmg.gv.at / home / Schwerpunkte / Krankenanstalten /.

[4] Neubauer G, Demmler G, Eberhard G, Rehermann P: Erprobung der Fallklassifikation "Patient Management Categories" für Krankenhauspatienten; Ergebnisbericht. Baden-Baden 1992 (Nomos): ca. 360 pp.

[5] Neubauer G, Demmler G, Eberhard G: Erprobung der Fallklassifikation "Patient Management Categories" für Krankenhauspatienten; Anlagenbericht: Klinische Überprüfung der Plausibilität für die Bundesrepublik Deutschland. Baden-Baden 1992 (Nomos): 356 pp.

[6] Fischer W: Diagnosis Related Groups (DRGs) im Vergleich zu den Patientenklassifkationssystemen von Österreich und Deutschland (A Comparison of PCS Construction Principles of the American DRGs, the Austrian LDF System, and the German FP/SE System). Z/I/M, Wolfertswil 1999: 155 pp.
Internet: http:// www.fischer-zim.ch / studien / DRGs-im-Vergleich-9901-Info.htm.

[7] Eichhorn S, Neubauer G; Baugut G, Philippi M, Rehermann P: Leitfaden zur Einführung von Fallpauschalen und Sonderentgelten gemäss Bundespflegesatzverordnung 1995. Datenbedarf, Kalkulationsgrundlagen, Abrechnungsmodalitäten, Kostenausgliederung. Baden-Baden 1995 (Nomos): 210 pp.

[8] BMG-D: Bundesministerium für Gesundheit [Hrsg.]: Gutachten Weiterentwicklung der Fallpauschalen und Sonderentgelte nach der Bundespflegesatzverordnung: Bericht zu den Forschungsprojekten im Auftrag des Bundesministeriums für Gesundheit. Baden-Baden 1997 (Nomos).

[9] Steinum O: A Correct DRG Allocation Presupposes Correct Diagnoses. In: Proceedings of the 11th PCS/E International Working Conference. Oslo, 1995: 43-48.

[10] Fischer W: Comparison of Cost Weight Proportions of Different Patient Classification Systems. In: Proceedings of the 13th PCS/E International Working Conference. Florence, 1997: 230-234.
Internet: http:// www.fischer-zim.ch / paper-en / Cost-Weights-9710-PCSE.htm.

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