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Development of a simulation program for estimating hospital incomes under the prospective payment system
Toshikazu Abe1, Shin-Ichi Toyabe, Pengyu Cao
1Division of Information Science and Biostatistics Niigata University Graduate School of Medical and Dental Sciences, Asahimachi-Dori 1, Niigata 951-8520, Japan.
Computer Methods and Programs in Biomedicine
|October 13, 2005
Summary
Japanese hospitals use a diagnosis procedure combination (DPC) prospective payment system (PPS) to increase income by shortening average length of stay (ALOS) and patient numbers. A new simulation program helps predict optimal ALOS and patient counts for each DPC to maximize hospital revenue.
Area of Science:
- Health Economics
- Hospital Management
- Health Services Research
Background:
- Japan introduced a diagnosis procedure combination (DPC) prospective payment system (PPS) in April 2003 for acute care hospitals.
- Under DPC/PPS, hospitals aim to increase revenue by reducing average length of stay (ALOS) and increasing patient volume.
Purpose of the Study:
- To develop a simulation program to analyze the relationship between ALOS, bed occupation rate (BOR), and hospital income under DPC/PPS.
- To identify optimal ALOS and patient numbers for each DPC to maximize hospital income.
Main Methods:
- Construction of a simulation program to model DPC/PPS financial dynamics.
- Inputting and regulating ALOS and patient numbers for individual DPCs within the simulation.
- Evaluating the impact of these adjustments on overall hospital income and BOR.
Main Results:
- The simulation program accurately evaluates hospital income by adjusting ALOS and patient counts per DPC.
- The tool enables prediction of optimal ALOS and inpatient numbers for each DPC to enhance financial performance.
Conclusions:
- The developed simulation program is a valuable tool for hospitals operating under DPC/PPS.
- It facilitates strategic decision-making to optimize operational parameters for increased hospital income.
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