[Experiences with financing of hospital services based on diagnosis related groups in the USA]

In 1983 Medicare in the US started to use the DRG system as a basis for a prospective system of reimbursement for treatment of patients at hospitals providing acute care. The consequences were as follows: Lengths of stay were markedly reduced, and the number of admissions and the occupancy rate went down. On the other hand the proportion of readmissions increased, whilst use of home health care and nursing homes became more common. The rate of increase in expenditure fell by 50% the first year with the DRGs. The number of employees was reduced. About 250 hospitals were closed after 1983. Hospitals in urban areas benefited from the new system, but not hospitals in rural districts. The system has favoured training hospitals.