The challenge of DRG to hospital market from the perspective of service efficiency

The average length of stay in different hospitals was significantly different On the whole, the higher the level and the larger the scale of the hospital, the more complex the disease to be treated and the longer the hospital stay In 2017, the average length of stay of Chinese hospitals was 9.3 days, down 1.2 days from 10.5 days in 2010 The average length of stay in public hospitals was 9.4 days, down 1.3 days compared with 2010, while that in private hospitals was 8.7 days, up 0.3 days compared with 2010, especially after 2015, the length of stay in private hospitals increased significantly As 74% of private hospitals are first-class hospitals, and 75% of public hospitals are second-class and third-class hospitals, private hospitals are significantly lower than public hospitals in terms of the critical degree of inpatients However, the length of stay of private hospitals is close to that of public hospitals, and it continues to rise when the length of stay in large environment becomes shorter, which shows that the efficiency of inpatient service is not economic Figure 1: comparison of average length of stay between public hospitals and private hospitals Data source: Statistical Yearbook of health and Family Planning Commission, latitude health analysis In terms of public hospitals, the length of stay in tertiary hospitals is the longest, 9.8 days, but the decline is the largest, 0.7 days less than that in 2010, 8.7 days for secondary hospitals and 8.6 days for primary hospitals, which is close According to the hospital attributes, the average length of stay in general hospitals is 8.5 days The length of stay in the general hospital is 8.5 days, while that in the provincial and local hospitals is 9.3 days and 9.5 days, respectively The length of stay in the county-level hospitals is relatively short, 8.2 days for the municipal and 7.5 days for the county-level hospitals Compared with 2010, the most rapid decline in length of stay was in the hospital affiliated to the central government and provincial government, while the change in length of stay in county-level hospital was not obvious From the above data analysis of length of stay, we can get the following points: Figure 2: average length of stay in general hospitals and public hospitals Data source: Statistical Yearbook of health and Family Planning Commission, latitude health analysis First, the length of stay in the overall hospital continued to decline, but mainly due to the shorter length of stay in public hospitals, while the length of stay in private hospitals continued to rise, especially after 2015 From the experience of DRG implementation in Taiwan and Japan, the length of stay after DRG implementation will be significantly reduced At that time, if all hospitals implement DRG payment rules, private hospitals will be significantly affected Second, since 2010, the length of stay in Level 3 public hospitals has declined the fastest, while that in level 1 public hospitals has declined the slowest However, according to the data in 2017, the length of stay of tertiary hospitals is still 1.2 days longer than that of primary hospitals Although the gap is narrower than that in 2010, it is still obvious After the implementation of DRG in Taiwan, the direct impact on large hospitals is relatively rapid, with a relatively significant decline, while the impact on small hospitals is relatively slow, but it has continued to decline From this point of view, hospitals of different sizes are affected by DRG at different speeds and to different degrees Third, in general hospitals, the change of length of stay in county-level hospitals is the least obvious in recent years, while the length of stay in general hospitals belonging to the committee, the province and the prefecture has declined significantly Due to the differences between county hospitals and higher level hospitals in strength and service volume, if the service volume is greatly affected, county hospitals will be greatly impacted There is a significant difference in the cost of inpatients between different types of medical insurance According to the medical insurance data released by the state health insurance bureau, in 2018, the average inpatient cost of urban employees' medical insurance participants was 11181 yuan, and the average inpatient cost of urban and rural residents' insurance participants was 6577 yuan, the former was 1.7 times of the latter, and the gap between the two has gradually expanded since 2011 In addition, the hospitalization rate of the two types of medical insurance participants continues to rise, especially for urban and rural residents, which is close to urban employees There is a significant difference in per capita hospitalization cost between different levels of hospitals In 2017, the per capita hospitalization expenses of all hospitals were 8890.7 yuan, with an average annual growth rate of 5% from 2010 to 2017; the average annual growth rate of public hospitals was 9563 yuan, with an average annual growth rate of 6% It can be concluded that the hospitalization cost of private hospitals is lower than that of public hospitals, and the average annual growth rate is lower than that of public hospitals Combined with the difference in length of stay, it can be seen that the length of stay in private hospitals is longer, while the cost is lower than that in public hospitals There are several related factors behind this: first, the critical situation of private hospitals is lower than that of public hospitals, so the cost is lower; second, private hospitals may increase their income by lengthening the length of stay, which means that they spend more time on low-risk projects From the perspective of DRG implementation in Taiwan, Japan and Germany, the number of points given for complex hospitalization in critical situations is higher, while for simple hospitalization, the number of points is lower At present, most of the private hospitals in China are first-class hospitals, with low cost and hospitalization treatment requirements, which means lower payment costs If DRG is implemented, it will face the challenge of low cost and shorter hospitalization time, which will put great pressure on the overall operation Chart 3: average cost of hospitalization Data source: Statistical Yearbook of health and Family Planning Commission, latitude health analysis In public hospitals, the per capita hospitalization cost of tertiary hospitals in 2017 was 13000 yuan, that of secondary hospitals was 5799 yuan, and that of primary hospitals was 4603 yuan The average annual growth rate of per capita hospitalization cost of tertiary hospitals from 2010 to 2017 was 3%, that of secondary hospitals and primary hospitals was 4% and 7%, respectively It can be seen that the cost of the first-class hospital is growing fastest However, from the perspective of general hospital, there are obvious differences in hospital expenses at all levels The per capita cost of the hospital is as high as 22900 yuan, that of the provincial hospital is 17500 yuan, and that of the local hospital is over 10000 yuan, while that of the county-level city hospital and county hospital is 7115 yuan and 5116 yuan respectively Among them, the county-level hospitals are the fastest growing hospitals, while the growth of the provincial and commission hospitals is slow From the above two points, it can be seen that the hospitalization expenses of small-scale hospitals increase rapidly, which may be suppressed in the DRG environment Paying according to the risk of disease and resource consumption will play a more control role in the growth of expenses, especially for the low-risk disease group Figure 4: average hospitalization cost of public hospitals and general hospitals Data source: Statistical Yearbook of health and Family Planning Commission, latitude health analysis According to the two data indicators of length of stay and per capita cost of hospitalization, in general hospitals, the two types of hospitals that deviate from the trend line are commission hospitals and local hospitals In the case of short stay, the cost of the hospital is obviously high, which is mainly due to the more complicated condition and higher cost of the patients Local hospitals spend more time in the same type of treatment costs In the case of DRG payment, the former needs to consider the complexity of payment, while the latter needs longer treatment time In the case of the same level of cases, the length of hospitalization may have to be reduced in the case of DRG payment However, in terms of the combination of hospitalization days and per capita expenses in various provinces and cities, compared with other areas with similar hospitalization days, Shanghai, Beijing and Tianjin have significantly higher expenses It can be seen that the critical degree of local patients is higher, the complexity is greater, and the expenses are higher There are also areas such as Shanxi, Liaoning and Sichuan, which have similar expenses but longer hospital stay compared with similar areas Areas with such characteristics will obviously face the challenge of shorter hospital stay in DRG Figure 5: inpatient days vs per capita inpatient cost in each province