Changes in the utilization of diagnostic codes in neonatology following the introduction of activity-based financing

Activity-based financing was introduced in public hospitals in Norway in 1997. Following this, hospitals have been financed in part by block grants, in part by grants based on productivity as measured through weighted diagnosis-related groups (DRGs). Insufficient national data were available to allow for proper calculation of DRG weights for neonatology. Thus, data from other countries were used to estimate weights. It seemed of interest to examine whether the use of diagnostic codes in neonatal medicine was changed following the introduction of activity-based financing and DRGs. Data from 1994, 1996, 1998, and 2000 were obtained from the proprietary database of the NICU at Rikshospitalet, University of Oslo, as well as from the hospital Patient Information Management System. Diagnoses were organized into 39 categories, counted for each of the 4 years, and analyzed by non-parametric ANOVA. There were significant changes in the use of diagnostic categories during the 1994-2000 time period. Some diagnoses which previously have been only rarely used, became more frequent. The use of other diagnoses varied in ways that could only be understood in terms of tactical usage. It is concluded that the use of DRGs as a basis for activity-based financing may result in changes in the use of certain diagnostic categories which are not related to biological changes in the patient population. This may complicate epidemiological research. On the other hand, activity-based financing may result in increased attention to the diagnostic process, leading to increased use of secondary diagnoses and thus more complete diagnostic coding.