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Health Serv Res. Apr 1999; 34(1 Pt 2): 405–415.
PMCID: PMC1089010

Impact of a DRG-based hospital financing system on quality and outcomes of care in Italy.


OBJECTIVE: To examine potential changes in quality of care associated with a recent financing system implementation in Italy: in 1995, hospital financing reform implemented in Italy included the introduction of a DRG-based hospital financing system with the goals of controlling the growth of hospital costs and making hospitals more accountable for their productivity. DATA SOURCES: Hospital discharge abstract data from 1993 through 1996 for all hospitals (N=32) in the Friuli-Venezia-Giulia region of Italy. Regional population data were used to calculate rates. STUDY DESIGN: Changes between 1993 and 1996 in hospital admissions, length of stay, mortality rates, severity of illness, and readmission rates were studied for nine common medical and surgical conditions: appendicitis, diabetes mellitus, colorectal cancer, cholecystitis, bronchitis/chronic obstructive pulmonary disease (COPD), bacterial pneumonia, coronary artery disease, cerebrovascular disease, and hip fracture. PRINCIPAL FINDINGS: The total number of ordinary hospital admissions decreased from 244,581 to 204,054 between 1993 and 1996, a population-based decrease of 17.3 percent (p<.001). The mean length of stay decreased from 9.1 days to 8.8 days, resulting in a 21.1 percent decrease in hospital bed days (p<.001). Day hospital use increased sevenfold from 16,871 encounters in 1993 to 108,517 encounters in 1996. The largest decrease in hospital admissions among study conditions was a 41 percent decrease for diabetes (from 2.25 per 1,000 in 1993 to 1.31 in 1996, p<.001). For eight of the nine conditions, severity of illness increased. Differences between severity-adjusted expected and observed in-hospital mortality rates were small. CONCLUSIONS: Observed trends showed a decrease in ordinary hospital admissions, an increase in day hospital admissions, and a greater severity of illness among hospitalized patients. There was little or no change in mortality and readmission rates. Administrative data can be used to track changes in patterns of care and to identify potential quality problems deserving further review.

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