Combining clinical budgets and DRGs for quality management

Global and clinical budgets are being introduced in the U.K. as elsewhere to control health care costs. They are in fact showing effectiveness in terms of cost-control. They do not, however, adequately address outcomes and quality of care. DRGs could be used as a tool for associating costs with outcome and quality measures. If constructed carefully, the categorization through DRGs could give health system managers information about which prices for treatments can be reduced without affecting quality standards but can also provide a warning when lower prices begin to be associated with deterioration of outcomes.