Client: Estonian Health Insurance Fund

Period: 2016

The purpose of this study was to evaluate the statistical adjustment of the currently used method for calculating DRG reference price and price limits and to suggest improvements for the existing DRG price calculating method. Special emphasis was on DRGs with a small number of treatment cases and DRGs where the lowest price limit turns negative when using today’s cutting mechanism.
To fulfil the research task, the current method of DRG price calculation was compared to alternatives containing methodical modifications put forward by the authors.

Summarised recommendations based on the research:
• To consider altering the DRG reference price and price limit calculation method so that the price limits would be calculated based on the 5th and 90th percentile of the cost of treatment cases in a DRG, and the reference price would be the arithmetic average of treatment cases within the 5th and 90th percentile.The advantages of this recommendation: simpler calculation method, elimination of the problem of a negative value lowest price limit, narrower price limits than in the current system.

• To consider calculating the price limits for DRGs that have less than 30 treatment cases per year by using the summarised data of treatment cases over the last 24 months as the basis. The advantage of this recommendation: the assumption is that it will lead to more stable price limits over the years.
• To consider reducing the number of exceptions in the exceptions hierarchy as much as other considerations besides statistical adjustment will allow. The advantage of this recommendation: a smaller number of treatment cases that fall outside the DRG pricing system.