Cost Accounting to Determine Prices: How Well Do Prices Reflect Costs in the German DRG-System?

Health Care Management Science, Vol. 9, No. 3, pp. 269-280, 2006

Posted: 26 Mar 2010 Last revised: 20 Aug 2010

See all articles by Jonas Schreyoegg

Jonas Schreyoegg

University of Hamburg - Faculty of Economics and Business Administration

Oliver Tiemann

University of Hamburg - Faculty of Economics and Business Administration

Reinhard Busse

Technische Universität Berlin (TU Berlin)

Date Written: 2006

Abstract

Germany has recently introduced a system of Diagnosis Related Groups (DRGs) to engender more appropriate resource allocation. The following article describes the German DRG-system and the methodologies used to determine prices. It analyses the extent to which prices, or calculated cost weights, reflect the actual costs incurred by hospitals for their respective services. We reveal that a "compression" of DRG cost weights occurs, and that the data sample used to calculate cost weights is lacking in terms of its representativeness. Although cost data accuracy has improved over the last few years there are still a number of challenges that need to be addressed.

Suggested Citation

Schreyoegg, Jonas and Tiemann, Oliver and Busse, Reinhard, Cost Accounting to Determine Prices: How Well Do Prices Reflect Costs in the German DRG-System? (2006). Health Care Management Science, Vol. 9, No. 3, pp. 269-280, 2006. Available at SSRN: https://ssrn.com/abstract=1574166

Jonas Schreyoegg (Contact Author)

University of Hamburg - Faculty of Economics and Business Administration ( email )

Von-Melle-Park 5
Hamburg, 20146
Germany

Oliver Tiemann

University of Hamburg - Faculty of Economics and Business Administration ( email )

Von-Melle-Park 5
Hamburg, 20146
Germany

Reinhard Busse

Technische Universität Berlin (TU Berlin) ( email )

Straße des 17
Juni 135
Berlin, 10623
Germany

Register to save articles to
your library

Register

Paper statistics

Abstract Views
446
PlumX Metrics