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Eur J Public Health. 2016 Feb;26(1):42-7. doi: 10.1093/eurpub/ckv162. Epub 2015 Sep 14.

The effect of competition on the relationship between the introduction of the DRG system and quality of care in Korea.

Author information

1
1 Department of Public Health, Graduate School, Yonsei University, Seoul, Republic of Korea 2 Institute of Health Services Research, Yonsei University, Seoul, Republic of Korea.
2
2 Institute of Health Services Research, Yonsei University, Seoul, Republic of Korea 3 Department of Preventive Medicine, Yonsei University College of Medicine, Seoul, Republic of Korea.
3
4 Department of Health Administration and Management, College of Medical Science, Soonchunhyang University, Asan, Republic of Korea.
4
5 College of Pharmacy, Yonsei Institute for Pharmaceutical Sciences, Yonsei University, Incheon, Republic of Korea.
5
2 Institute of Health Services Research, Yonsei University, Seoul, Republic of Korea 6 Department of Hospital Administration, Graduate School of Public Health, Yonsei University, Seoul, Republic of Korea thkim@yuhs.ac.

Abstract

BACKGROUND:

The diagnosis-related group-based prospective payment programme was introduced in Korea in 1997 as a pilot programme to control health spending. In July 2013, the programme was implemented throughout the nation. The aim of our study is to evaluate the relationship between quality of care and market competition following the introduction of the new payment system in Korea.

METHODS:

We conduct an observational analysis using National Health Insurance claim data from 2011 to 2014. We analyse data on readmission within 30 days, length of stay, and number of outpatient visits for 1742 hospitals and 821 912 cases. We use a generalized estimating equation model to evaluate readmission within 30 days and number of outpatient visits and a multi-level regression model to assess length of stay.

RESULTS:

Total readmission within 30 days is 10 727 (1.3%). High competition areas present a lower risk of readmission [odds ratio (OR): 0.95, P: 0.0277], a longer length of stay (1%, P < 0.0001), and an increased number of outpatient visits (Relative Risk: 1.11, P: 0.0011) as compared with moderate competition areas. Risk of readmission is higher in low competition areas as compared with moderate competition areas (OR: 1.21, P < 0.0001).

CONCLUSION:

The effects of the introduction of the new payment system differed by degree of market competition. Thus, evaluation about the effect of new payment system on hospital performance should be measured in combination with the degree of hospital market structure.

PMID:
26370438
DOI:
10.1093/eurpub/ckv162
[Indexed for MEDLINE]

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