Cost accounting to determine prices: How well do prices reflect costs in the German DRG-system?

Germany has recently introduced a system of Diagnosis Related Groups (DRGs) to engender more appropriate resource allocation. The following article describes the German DRG-system and the methodologies used to determine prices. It analyses the extent to which prices, or calculated cost weights, refl...

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Bibliographic Details
Published in:Health care management science Vol. 9; no. 3; pp. 269 - 279
Main Authors: Schreyögg, Jonas, Tiemann, Oliver, Busse, Reinhard
Format: Journal Article
Language:English
Published: Netherlands Springer 01.08.2006
Springer Nature B.V
Series:Health Care Management Science
Subjects:
Accounting
Accounting - methods
Capital costs
Costs
Diagnosis related groups
DRGs
Fees & charges
Financial management
Germany
Health care policy
Health insurance
Hospital Charges
Hospital Costs
Hospital information systems
Hospitals
Information systems
National Health Programs
Patients
Prospective Payment System
Prospective payment systems
Reimbursement
Studies
Ventilation
Germany
ISSN:1386-9620, 1572-9389
Online Access:Get full text
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Summary:Germany has recently introduced a system of Diagnosis Related Groups (DRGs) to engender more appropriate resource allocation. The following article describes the German DRG-system and the methodologies used to determine prices. It analyses the extent to which prices, or calculated cost weights, reflect the actual costs incurred by hospitals for their respective services. We reveal that a "compression" of DRG cost weights occurs, and that the data sample used to calculate cost weights is lacking in terms of its representativeness. Although cost data accuracy has improved over the last few years there are still a number of challenges that need to be addressed.
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ISSN:1386-9620
1572-9389
DOI:10.1007/s10729-006-9094-0