Designing and Implementing Health Care Provider Payment Systems: How-To Manuals

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In Argentina, the methodology for verifying a sample of facilities has been based on targeting higher-volume facilities for more regular visits. In Zimbabwe they use a combination of targeting higher-volume facilities, and tracking the history of misreporting by individual facilities targeting those which are repeat offenders. This latter methodology is commonly referred to as risk-based verification. There is no single way of carrying out risk-based verification, and various methodologies have been under discussion in countries building on the experience of Zimbabwe.

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Most low-income and lower-middle-income countries have digitized their national-level health information database on service provision. In many settings, this is based on the DHIS2 platform.

Efforts are underway in many countries, including those with PBF schemes, to go further to digitizing patient charts and having those platforms directly feed higher-level health databases. This process will take time, as it confronts limited financial resources, and infrastructural challenges. Having timely and accurate data may require heavy investment, however its value cannot be overstated. Data used for payments should be at the core of a database on patient activity that can reveal a lot about patterns of service use and outcomes in a country.

This data can be used both for payment, and for improved service delivery, and indeed to guide policy. Data used for payment of individual services delivered should aim to become more sophisticated, basing itself on whether treatment protocols were followed. The data should also be used to assess policy questions such as where services should be consumed, and how many points of care should exist. Health, Nutrition and Population Discussion Paper;. Borghi et al. John C. Cashin, eds. Kutzin et al. Or at least a cost agreed to mostly by the purchaser and somewhat by the provider as being acceptable.

Assuming the cost to verify is the same whether the purchaser pays partial cost or full cost. Petra Vergeer et al. All of the authors are part of a Collectivity working group on verification whose objective is to help develop the thinking about how to tailor verification approaches to the circumstances of LMICs, including those with low population density or which are conflict-affected.

The output of this group has so far included a workshop in Brussels, the proceedings of which will be the subject of a brief to be published. A webinar was held in French on this topic, with another planned in English soon. The key publication will be a report on a survey carried out in six countries exploring how verification is conducted today, what innovations are already in place, and how representatives of those countries believe it may evolve in future. Our hope is that the work of this group will inform practitioners across the world to make changes to how verification is carried out.

This paper addresses this gap in the literature by being the first to provide a comprehensive overview and assessment of DRG experiences in low- and middle-income countries. Its purpose is to compile country experiences and to explore the design and implementation issues that low- and middle-income countries face. Ultimately it will be a source of policy lessons for policy-makers in other low- and middle-income countries who are deliberating on whether or not — and, if so, how — to move towards a DRG-based payment system.

Because the evidence is scanty and impact evaluations are few, this paper cannot review the impact of DRG-based payment systems.

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It can only provide illustrative examples of policy lever effects, primarily from countries that have already established a DRG-based payment system. The following section briefly outlines the methods and core design components that we followed in assessing countries' experiences with DRG-based payment systems. We subsequently present emerging aspects and trends in the design and implementation of these systems. These and the challenges they entail are considered in the discussion section, which is followed by a set of conclusions and policy lessons for other countries that are exploring the establishment of DRG-based payment systems.

The figure also outlines how values can be set for these components and their potential effect as policy levers. We will explore country experiences in terms of these design components and the respective policy levers i. Importantly, the qualitative and quantitative effect of a DRG-based payment system is also contingent upon the payment mechanism that is replaced.


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Several issues are involved in the operation of a DRG-based payment system. Foremost, such a payment system creates unwanted incentives for increased hospital admissions, up-coding i.

Towards Reforming Health Provider Payment Methods: Evidence from Iran

This occurs in all settings. We conducted a search of the literature published from until December Since we found very few sources that fulfilled our criteria, we also searched Google in the three languages to capture the grey literature e. We also consulted health financing experts from the different regions of the World Health Organization to confirm the country list. The name of each country was combined with the following search terms or phrases: DRG , diagnosis-related groups , case-mix , provider payment mechanism , health system financing and case-based funding.

In this way we not only established a list of countries applying or developing a DRG-based payment system, but also — and more importantly — retrieved more information on those critical aspects of system design and implementation that we described earlier. The study selection process is outlined in Fig. We used 84 documents for this country-based analysis. Flowchart showing study selection process for systematic review of studies on payment systems based on diagnosis-related groups DRGs in low- and middle-income countries.

This overview focuses on low- and middle-income countries that have already established — or are in the process of developing — DRG-based payment systems. Because it also seeks to explore critical aspects of design and implementation, it also includes all those countries with established DRG-based payment systems that were in the World Bank's middle-income country category when they adopted such systems but that have moved into the high-income category within the past 10 years.

How we classify countries. Washington: WB; In this way we have tried to capture the experience of low- and middle-income countries over a full decade of development of DRG-based payment systems. Twelve low- and middle-income countries located in all regions had established a DRG-based payment system by the end of Another 17 countries are currently piloting or exploring design options for the establishment of such a system. Of the 12 countries with an established system, only Kyrgyzstan is a low-income country; most are located in eastern Europe, and nine were under Soviet influence.

The second group of countries — those piloting systems or exploring design options — is composed of middle-income countries, only two of which are classified as being in the lower-middle-income bracket. They, too, are situated in all regions.


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This group of countries may not be comprehensive, however, since other countries may also be exploring the development of a DRG-based payment system but policy documentation to this effect might not be publicly available. One country — Kazakhstan — introduced a DRG-based payment system but abandoned it in Lessons from two decades of health reform in Central Asia.

Health Policy Plan ;—7. Several other countries, such as Ghana and the Philippines, have introduced case-mix-based payments and may want to move towards DRG-based payment systems at a later stage. A health sector in transition to universal coverage in Ghana.

Washington: World Bank; DRG-based payment systems in low- and middle-income countries: implementation experiences and challenges. As is the case in many high-income countries, DRG-based payment systems were usually introduced in the countries described in this paper to contain costs, to increase efficiency in inpatient care or to improve transparency in hospital activities. Health systems in transition: Estonia — health system review. Manas Health Policy Analysis Project: innovations in resource allocation, pooling and purchasing in the Kyrgyz health system. Bismarck meets Beveridge on the Silk Road: coordinating funding sources to create a universal health financing system in Kyrgyzstan.

Bull World Health Organ ;— Realignment of incentives for health-care providers in China. Lancet ;— A model for Germany? Gesundheitswesen ;— Sofia: Ministry of Health; Copenhagen: World Health Organization; Serbia and DRG. Berlin: Berlin University of Technology; DRG — diagnosis-telated groups: annual report Skopje: Health Insurance Fund Macedonia; In Croatia, DRG-based payment is used to increase the number of cases seen and reduce waiting lists. Croatian — health insurance reform: hard choices toward financial sustainability and efficiency.

Croat Med J ;— As discussed in the following section, these specific objectives are, in principle, decisive when it comes to choosing a particular design for a DRG-based payment system. Most low- and middle-income countries use DRG-based payments as a retrospective payment mechanism; only The former Yugoslav Republic of Macedonia uses DRGs as a basis for prospective budgeting decisions.

The DRG variant chosen by a country determines the number of case groups as well as the cost weights or range of cost weights used, yet country-specific adjustments, to be discussed in a subsequent section, may be required. Moreover, some countries switched from one variant to another or developed their DRG-based systems over time by making adjustments, such as generating more detailed and specific case groupings.

This dynamic developmental process of introducing and implementing DRGs appears to reflect improvements in administrative and operational capacity, i. Most of the low- and middle-income countries in this study use a DRG-based hospital payment system consisting of about to case groups.