The consequences of introducing a DRG-based prospective payment system on the average costs

Austria introduced a Diagnosis-Related Groups (DRG)-based prospective payment system in 1997. Since then, politicians assume that the total costs now are actually under control. This can be doubted, as the costs for inpatient care are said to increase disproportionately to general healthcare expenditure. The aims of the present study are to analyse if the introduction of the Austrian DRG-based prospective payment system led to an increase in average treatments due to the new payment system and if the average costs could be decreased or at least kept constant due to the new payment system. It turns out that the average costs are rising throughout the country far more than the respective average DRG points. According to the results, the standard performance of hospitals increased slightly and the total number of beds decreased only slightly. The results suggest that the goals have not been met and research regarding an improvement of the payment system should be initiated.