Alternatives to DRGs: research issues

Legislative mandates for the development of prospective payment methodologies for reimbursing inpatient care have spurred the psychiatric community into its own independent effort, applying both clinical and service research, to develop schemes which are fair to psychiatric patients, their providers and payers. Many of the issues involved in the development of an equitable prospective payment system (PPS) for psychiatric care are not new to the field, namely, problems of limited diagnostic accuracy, a limited knowledge of the outcomes of clearly defined treatment protocols, and a lack of integration, efficiency and efficacy in a highly differentiated service system. The research community needs to respond to these problems in the context of cost containment with an awareness that its response will influence care for psychiatric patients for the remainder of this century. In this paper, we will describe the background issues that have brought the psychiatric community to the present point in its response to PPS, and discuss some of the research problems posed by the need for a PPS with the right incentives for clinical effectiveness and efficiency.