Contract-program evaluation: Impact of the DRG classification system on hospitals' outputs

A Work Project, presented as part of the requirements for the Award of a Masters Degree in Management from the NOVA – School of Business and Economics

The present work project aims at evaluating the impact of contract-program implementation in 2003 and of incentives created in 2007 on hospital output, under the DRG inpatient classification system. A sample of five Portuguese acute public district hospitals was chosen as sample, between 2002 and 2007. Results of hypothesis testing shows positive significant effects on decreasing average lengths of stay, despite significant average age and case-mix increases verified after 2002. Increasing rates of elective outpatient surgeries were also proved significant. Effects of the introduction of 25 new medical outpatient DRG prices in 2007 were proven significant, even if a clear trend was not observable in terms of increases on outpatient discharges, exception made for DRG 410 (chemotherapy). Regression analysis, aiming at detecting upcoding effects in 109 DRG pairs, showed sensitiveness of fraction of the most complicated DRG on each pair to positive changes in DRG prices, for 3 out of 5 hospitals. However, average negative price changes verified for the considered timeframe cancelled expected upcoding effects.