PUTRAJAYA, Jan 10 — Universiti Malaya Medical Centre (UMMC) saw vast improvements in its efficiency and quality of care after just three years of implementing the diagnosis-related groups (DRG) costing model.
Prof Dr Maznah Dahlui – a health economist from Universiti Malaya who was appointed last Nov 12 as chairwoman of the technical advisory committee for the provider payment mechanism using DRG under the Ministry of Health (MOH) – said using the DRG model allowed UMMC to show that it treats complex cases with complicated procedures, even if the volume of such cases at the university hospital may not be as high as MOH tertiary hospitals.
“From the exercise that we did from 2020 to 2022, we’ve proven that we’re very efficient because our cost is more or less similar. Our hospital-based rate is more or less similar to tertiary hospitals or specialised hospitals under the Ministry of Health,” Dr Maznah told a town hall at the MOH’s headquarters here yesterday on the DRG.
The town hall – moderated by MOH deputy secretary-general (finance) Norazman Ayob – was attended by various stakeholders from private hospitals, university hospitals, insurers, doctors’ associations, think tanks, and state health directors in the ministry, among others. CodeBlue also attended the session.
Dr Maznah, who is the deputy dean (development) of the Faculty of Medicine at Universiti Malaya, explained that prior to the implementation of DRG, also called casemix, UMMC saw many short-term outliers, either because of the cancellation of elective cases or unnecessary admissions.
Patients are admitted unnecessarily because specialist doctors are sometimes too busy to come down to the emergency department, hence they are admitted “to be safe”, according to Dr Maznah. But when the patient sees the specialist the next day, they are then discharged.
“All this was able to be avoided with the implementation of DRG in our hospital,” said Dr Maznah, who is also a public health physician.
Dr Maznah explained that in a DRG model, the costing is top-down, in which the hospital’s income is trickled down to units.
“This is where we can ensure that whatever cost or whatever tariff we present to the sponsor or financier, if we multiply it with the expected number of cases that we foresee subsequent years, actually this can ensure sustainability of hospital functioning in terms of its financing.”
Unlike conventional itemised billing that looks at individual cases, costing under a DRG model is calculated based on the functions of the entire hospital for not just the current year, but also the next several years.
Malaysia currently has two DRG models: one under the MOH and another developed by Universiti Kebangsaan Malaysia (UKM). UMMC uses both.
Dr Maznah suggested that Malaysia move towards creating a unified DRG Grouper that can also be used by private hospitals.
“So I think this is not necessarily 100 per cent implementation for all hospitals in the country, but we can start in MOH at the district level and some private hospitals. For the Ministry of Higher Education (MOHE), we have 10 hospitals.
“What is mandated by MOHE is for us to implement it in all teaching hospitals, but rather than use separate ones, we might as well straight away start a unified DRG.”
According to a presentation by Dr Mohd Ridzwan Shahari, a public health medicine specialist at MOH’s medical development division, the MOH piloted the DRG model in six MOH hospitals in 2010, before expanding it to 38 MOH hospitals in 2016.
In 2023, the DRG model was fully expanded to all 149 MOH hospitals under a MyCMX system development. Despite having had the DRG system in place at dozens of hospitals for nearly a decade, the MOH has only ever used historical budgeting for its ministry-wide allocations.
Syed Aljunid: Implementing DRG Doesn’t Need EMR System
Health economist Prof Dr Syed Mohamed Aljunid Syed Junid from IMU University, who was part of the panel discussion at the town hall, said hospitals do not need to have electronic medical records (EMR) or a sophisticated information system to run a DRG model.
“When I was invited to Indonesia in 2004, we used handphones for them to claim. The system is very agile and it can be adapted easily,” he said, relating to his work in Indonesia. Dr Syed Aljunid is the developer and copyright owner of six casemix software.
He pointed out that 65 per cent of coding errors are actually due to clinicians failing to complete the discharge summary in the DRG system, whereas 30 per cent of errors are due to untrained coders. Two to three weeks of training can reduce such errors to 10 per cent.
“If we have EMR, it’s good. If we don’t have it, we can still manage using a paper-based system. The software may not be linked directly to HIS (health information system). If we have it, then it’s good; we can just import it. In UMMC, we import all this from their HIS,” Dr Syed Aljunid told the town hall.
“If you have EMR, but if the doctor is not filling anything, that’s worse than paper-based.”
The professor of health economics, policy and management at the Department of Public Health and Community Medicine at IMU University said he has visited some hospitals where doctors did not make any entry in the EMR system.
On one occasion, an endocrinologist simply entered DM into the system for diabetes mellitus, but left it unspecified, without even specifying if it was Type 1 or Type 2 diabetes. “Unspecified” means it will go to the lowest cost rate in the DRG.
Doctors also sometimes fail to input details like the use of respirators. “Your cost rate goes three times higher than basic. But if it’s not written as a procedure, you lose money.” There are also different codes for complications, such as diabetic ketoacidosis with a cost rate that is double that of a regular patient.
Under a DRG model, levels of severity for complex cases go up to 3 or 4, sometimes up to 10, that are defined by different costs.
Dr Syed Aljunid said DRG has evolved around the world beyond classifications based on diagnosis and procedures, describing it as a “classification of a patient episode of care.” This comprises two features: iso-resource (average cost of a group) and clinical homogeneity (every group has the same clinical features).
“The DRG we see today uses different forms of variables, for example, diagnosis, but also other things, altogether 16 variables, including ICF (international classification of functioning).”
He added that DRG has different terms in various countries; it’s called casemix in Europe, health resource group in the UK, and case-based group (CBG) in Indonesia.
“Case-based group is the most advanced form of DRG that we’re using today,” Dr Syed Aljunid said. A CBG model includes sub-acute, acute, and chronic conditions, besides covering both inpatient and outpatient and also long-stay cases.
In response to a question on whether the DRG model will see private hospitals avoiding complicated cases, the health economist said if a patient is referred to another hospital halfway through treatment, the referring hospital may not be reimbursed at all. It won’t be able to receive any more patients in future either.
“One thing we use in DRG is balance billing – you’re allowed to charge above a certain level of the limit that’s given. The limit in the first stage is to prevent a shock in the system,” said Dr Syed Aljunid.
“For example, if a CABG (coronary artery bypass graft) costs RM50,000, when you negotiate, you might want to request, due to some reason, ‘give us 15 per cent extra balance bill.’ If it’s more than that, the patient pays directly to them. But this has to be controlled.”
The health economist said in his experience, hospitals prefer patients with complications because such cases bring in high revenue, to the extent that some hospitals in Indonesia put in fraudulent claims or false complications for reimbursement.
“Under fee for service, it’s difficult to check. But with DRG, it’s so simple. Look at the average, look at the outliers, pick up these hospitals. and you know something’s wrong. This is very difficult to do under fee for service.”
