From activity-based costing to Value-based care in Danish healthcare

BackgroundThe Danish healthcare system has, as others, been subject of discussions of how it should be managed and rewarded (payment) to be most beneficial for society. Naturally this has been subject to the dominating political winds. Hospitals are run by the Regions. From 2002 to today the hospitals have been controlled using a base budget and activity-based costing, also known as the DRG-system). The DRG-system ensures that a ward receives a payment for each activity performed e.g. consultation, surgery etc. The DRG-system does not account for all payments and wards also receive a base pay. The DRG-system has been highly successful in increasing number of treated patients and consequently reducing waiting lists. However, the DRG-system is criticised for generating too much activity and incentivising treating of patients beyond need. The Capital Region has initiated 7 test projects with the purpose of developing, implementing and evaluating value-based care as alternative to the DRG-system. Material and Methods Project descriptions from 7 Danish test cases in the Capital Region was collected. The project descriptions were analysed. The analysis focused on incentives, cost-consequences and changes compared to current state. ConclusionsWe present key changes in costing and payment to the departments in the 7 projects. The projects share features and structure but appear to borrow KPI's and logic from the existing activity-based costing system. There appear to be a need for developing measures that can capture patient related outcomes and provide useful incentives for hospitals and staff. The current activity-based-costing favours generating activity while indirectly punishing more efficient treatment regimens with less activity. "You get what you measure" and there is a need to understand how value-based care affect behaviour.