Homepage > Research abstracts > Evaluation of the change in payment for inpatient care in Israel from per-diem to activity-based payments, based on hospitals’ and physicians’ activities
Evaluation of the change in payment for inpatient care in Israel from per-diem to activity-based payments, based on hospitals’ and physicians’ activities
Researchers: Ruth Waitzberg1, Vadim Perman2
- Myers-JDC-Brookdale Institute
- Ministry of Health
Background: Since 2010, the Ministry of Health (MoH) has been expanding the adoption of procedure-related group (PRG) payments in place of per-diem payments. The objectives are to narrow costing/pricing gaps and improve the ministry’s ability to set priorities and to monitor and control hospital activities. In 2015, PRGs accounted for half of the income from procedures and the ministry will continue to create PRG codes.
Objectives: To examine the changes in hospital activity measured by activity indicators from administrative data systems and from the perspectives of managers and physicians.
Method: Mixed methods. Quantitative analysis with MoH data for all hospitals between 2005 and 2016, at the department and procedure levels. A qualitative analysis based on semi-structured in-depth interviews with 35 CEOs, managers, department heads and physicians in five hospitals.
Findings: We could not demonstrate the contribution of the PRG reform to changes in the average length of stay, the volume of activity or case-mix of patients in the departments that participated in the reform compared to those that did not participate, and in the 15 procedures examined. The qualitative analysis revealed the tension between incentives and barriers to change, which made it difficult for the system to respond to the payment reform.
The reform has contributed to the creation of a common language that promotes accurate coding, better measurement of activity, and transparency, and enables economic planning and dialogue between physicians and managers. It has also contributed to a reorganization of hospital activities and resources, including the diversion of activity from the morning to after-hours, and from inpatient to outpatient settings.
The reform has contributed to the creation of a common language that promotes accurate coding, better measurement of activity, and transparency, and enables economic planning and dialogue between physicians and managers. It has also contributed to a reorganization of hospital activities and resources, including the diversion of activity from the morning to after-hours, and from inpatient to outpatient settings.
Conclusions: The public nature and complex accounting systems of hospitals limit the ability to pinpoint responses to financial incentives.
Recommendations: It is recommended to coordinate the incentives of the various payment mechanisms and develop regulations to reduce the conflict among them.
Research number: R/77/2016
Research end date: 01/2019