Dubai Health Authority (DHA) is to overhaul funding delivery for hospitals under plans to cut out fee-for-service payments.
In a radical change, hospitals receiving patients under the new government health scheme will be paid a flat sum based on a classification system that groups certain treatments together.
The system, which is broadly based on the funding structure seen in Victoria, Australia, will mean hospitals must code and bill their treatment costs accurately to be paid.
It’s the first time a Diagnostic Related Group (DRG) structure has been used in the GCC.
Two hospitals are expected to start trialling the system early next year, said Simon Hodges, a senior government adviser, but it won’t be fully implemented until 2012.
“Everyone thinks it will take the hospital sector around two and a half years to be able to deal with a DRG system, from a structural point of view.”
Dr Haidar al Yousuf, the transition leader of the DHA, said the change would force public sector hospitals to survive on an annual budget.
Hospitals will be paid from the health contributions fund, financed by the mandatory insurance fees collected from employers and sponsors.
“Our public sector is inefficient at the moment, we need to address service delivery in the same way as the private sector does. We have the transition period…but they will have to maintain their budget at the end of the day,” Dr Al Yousuf said.
Professor Stan Capp is CEO of Sharjah Teaching Hospital and was finance director in Victoria, Australia’s Department of Health during the switch to a DRG structure.
For the payment system to be successful, hospitals must invest significantly in top-grade IT systems, he said.
“For the model to work you need good information, and that needs a very sophisticated hospital information system.
“The key issue is data integrity, then it’s just a question of applying a price.”
The biggest hurdle for the Authority will be pricing each DRG correctly, he added, and then reining in any abuse of the system.
“[Hospitals] will understand there is a system there, not to be exploited but played. It’s what we call gaming – where all of a sudden patients who weren’t admitted, are admitted and attract a higher rate.
“It comes back to having good data, so you can keep tabs and make hospitals accountable for what’s happening.”
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