DRG System and Reimbursement Realties in Home Health Care

[Title of Author]

[Title of Institute]DRG System and Reimbursement Realties in Home Health Care

Introduction

DRGs (Diagnostic Related Group) is based upon classification of patients in relation to their usage of health care resources. From their initial development in the late seventies by the Yale University to their current exploitation as economic incentives, they have found immense usage in our healthcare systems.

History of DRG:

It was in the late 90's when the healthcare system witnessed major reformations in its systems in an effort to improve the efficiency of the hospitals and to enable greater power to the patients. This was the advent of the Diagnosis Related Group system which was adopted far before critics and experts were able to relate to its consequences. In 1983, the vast adaptation of the process in order to reimburse hospitals based on the level. With ever high healthcare and treatment costs across the country, the phase began with the fixation of certain costs for the services provided by these health care institutes. Also as, hospitals were able to retain the incentives earned as a result of the fixed costs and the actual spending saved; the method served as an excellent incentive hoarding system. This however did place much pressure over the administrative staff that now needed to guide the practitioners and the physicians not only in regards to their practices, but also their behavior so as to be able to compete efficiently and effectively in the market in terms of their finance management.

DRG Systems and Modern Reimbursement Realities in Home Health Care:

Jessee (2005) argues at the concept of DRG has evolved from a mere experiment to one that has been hastily adopted by the medical community without much relevance to the basic aims of the healthcare community. From the time these systems were implemented, they have been under the limelight due to a host of reasons. Jessee's publications have highlighted how absurd the current payment incentives are for patients. Despite the theoretical aims for the establishment of the DRG, he has argued that medical complications have over the past years merged with the concepts of business practices so much that today these complications are a means of reaping greater profits and reimbursements. There has been sufficient pressure placed by various authoritative bodies to lessen the impact and occurrence of these complications; yet the economies as of present, provide little evidence and support for the same. This economic implication which he has termed as perverse” has been supported by a few examples which give one sufficient food for thought concerning the transparency of the health care system around us. However, the recent of payment that is being adopted by practitioners, basically to reimburse based on performance is an excellent way of inducing the element of enhanced patient care into the system. Also as, it results in greater reimbursements for physicians; one may find it hard to falsify this practice.

Limitations:

Jessie in his work “Ready or not, pay for performance is here” has ...