Some thoughts on health and healthcare

Abstract An acute hospital can be clinically successful and financially healthy only when quality management, clinical practice, operational efficiency, patient outcomes, and reimbursement are governed as one integrated system. The Donabedian model provides the conceptual logic: structures shape care processes, and processes determine outcomes. Value-based healthcare (VBHC) adds the strategic objective: maximize patient-relevant outcomes relative to the cost of achieving them. Evidence-based medicine and evidence-based practice provide the epistemic standard for clinical decisions, while Diagnosis Related Groups (DRG) impose a financial discipline by linking hospital revenue to case mix, coding, resource use, and length of stay. Patient-reported outcome measures (PROMs) and patient-reported experience measures (PREMs) ensure that “success” is not reduced to mortality, complications, throughput, or margin alone. The Electronic Health Record (EHR), supported by Clinical Decision Support ...

Abstract In an acute hospital, Diagnosis-Related Groups (DRGs) and patient-based costing solve different, complementary problems. DRGs are a prospective payment and case-mix classification mechanism : they group inpatient episodes for reimbursement and resource allocation using coded diagnoses, procedures, severity, and other episode variables. Patient-based costing - especially Activity-Based Costing (ABC) and Time-Driven Activity-Based Costing (TDABC) - is an internal measurement method : it estimates the actual resources consumed by a given patient across the care cycle. The practical implication is that DRGs tell the hospital what it is likely to be paid, while patient-based costing tells the hospital what the case actually cost. An effective acute-hospital costing architecture therefore requires structured EHR data, reliable timestamps and event logs, linkage to HR/finance/supply systems, and a semantic layer that uses SNOMED CT and LOINC for point-of-care capture and WHO ICD-11 a...

1. Introduction Major Diagnostic Categories (MDCs) and Diagnosis-Related Groups (DRGs) underpin prospective (case-based) payment by assigning inpatient stays to clinically coherent groups and paying a predetermined amount based largely on a relative weight (resource intensity) multiplied by a standardized/base rate, with further policy adjustments (e.g., wage index, teaching, disproportionate share, outliers). Under Medicare’s Inpatient Prospective Payment System (IPPS), for example, the US  Office of Inspector General (OIG) in the USA describes the operational payment logic as “DRG weight × standardized amount,” with additional adjustments layered onto the base payment. Prospective payment improves cost discipline, but it also creates predictable gaming surfaces: when revenue depends on coded diagnoses/procedures and discharge status, some actors can increase payment by manipulating codes, fragmenting bills, or selecting “profitable” patients (cherry picking/lemon dropping). The ...