Diagnosis-related groups (DRG): A Question & Answer guide on case-based classification and payment systems

Overview

More and more low- and middle-income countries are seeking to strengthen strategic purchasing arrangements in the health sector. Related thereto, payments based on case-based groups (CBG) or, more specifically, diagnosis-related groups (DRG) have gained increased interest from policy-makers across the globe.

When considering the introduction of a CBG system, many policy choices and technical questions arise. Policy-makers have to judge the pros and cons of a CBG system in relation to their country context and the health system challenges they wish to address. They will have to explore whether, and if so how, to introduce a CBG system, and should assess which institutional arrangements and resources are available and which would be required. Importantly, this guide on CBG does not suggest or imply that these payment methods are a magic bullet or the only option to consider when seeking to improve the payment system.

The purpose of this guide is to explore specifically the CBG-related policy questions and issues relevant to the context of low- and middle-income countries. The guide is written in a Question & Answer (Q&A) format. It provides literature references for further reading and more technical details as well as presents various country cases to illustrate specific issues.

The document consists of four parts:

Part 1 outlines definitions, terminology and the main conceptual aspects related to CBG and DRG.

Part 2 covers the assessment phase and highlights questions and issues that policy-makers should consider before taking the decision to introduce a CBG system.

Part 3 delves into the preparation phase by exploring policy and design aspects once a country has decided to introduce a CBG system.

Part 4 is concerned with the implementation phase and discusses implementation questions, requirements for system adjustments and the need for monitoring and revision in order to identify and address unintended impacts of a CBG system.