Australian diagnosis related groups: Drivers of complexity adjustment.

Background: In undertaking a major revision to the Australian Refined Diagnosis Related Group (ARDRG) classification, we set out to contrast Australia's approach to using data on additional (not principal) diagnoses with major international approaches in splitting base or Adjacent Diagnosis Related Groups (ADRGs).

Methods: Comparative policy analysis/narrative review of peer-reviewed and grey literature on international approaches to use of additional (secondary) diagnoses in the development of Australian and international DRG systems.

Analysis: European and US approaches to characterise complexity of inpatient care are well-documented, providing useful points of comparison with Australia's.

Prospective payment to encourage system wide quality improvement.

Background: Casemix-based inpatient prospective payment systems allocate payments for acute care based on what is done within an episode of care without regard for the outcome. To date, they have provided little incentive to improve quality. The Centers for Medicare & Medicaid Services have recently excluded 8 avoidable complications from their payment system.

Risk adjustment policy options for casemix funding: international lessons in financing reform.

This paper explores modified hospital casemix payment formulae that would refine the diagnosis-related group (DRG) system in Victoria, Australia, which already makes adjustments for teaching, severity and demographics. We estimate alternative casemix funding methods using multiple regressions for individual hospital episodes from 2001 to 2003 on 70 high-deficit DRGs, focussing on teaching hospitals where the largest deficits have occurred. Our casemix variables are diagnosis- and procedure-based severity markers, counts of diagnoses and procedures, disease types, complexity, day outliers, emergency admission and "transfers in.

The effect of increased private health insurance coverage on Victorian public hospitals.

It was anticipated that the recent reforms to private health insurance arrangements would reduce the demand pressures on Australian public hospitals. However, this has not been demonstrated by trends in elective surgery waiting lists in Victorian public hospitals. Moreover, it appears that the increased caseload assumed by Victorian private hospitals since the reforms took effect mainly reflects an increase in low cost same day episodes.