The effects of diagnosis-related groups payment on efficiency of the hospital health care in Croatia

AIM: To assess the impact of Croatian reforms related to the funding of inpatient care on the efficiency of acute hospitals. METHODS: Between 2009 and 2018, the study analyzed resourcing, performance, and financing data for 33 acute hospitals. It used data from the Croatian Health Insurance Fund (CHIF) and the Croatian Institute of Public Health and included hospital activity and diagnosis-related grouping; average length of stay (ALOS); hospital staffing; CHIF revenue streams; and hospital incomes and expenditures. RESULTS: During the study period, the cost-efficiency of Croatian public hospitals did not meaningfully improve. While ALOS decreased by 14% and the number of beds decreased by 12%, bed occupancy rates decreased by 9%, acute inpatient admissions by 5%, and diagnosis-related group (DRG)-weighted output by 16%. Hospitals operated at higher costs, as the average cost per DRG-weighted case increased by 17%, from HRK 11 828 in 2016, to HRK 13 897 in 2018. CONCLUSIONS: In this period, Croatian reforms failed to improve hospital efficiency. This may be explained by the failure of reformers to heed the experience of other countries, which showed that hospital payment reform of this nature calls for systematic and coordinated actions, inter-agency collaboration, and a strategic approach where the various interventions are in congruence and act to reinforce one another.