Strategy/Finance/Strategy — Cost Reimbursement versus Flat Fee — The Impact on the Efficiency and Effectiveness of Hospitals

The general international trend of preferring pricing procedures on a Diagnosis Related Group (DRG) basis with respect to acute hospital services is also present in the German health system. In this sense, the previous cost reimbursement principle which, in essence, provides every savings-oriented hospital with an individual and legally-prescribed claim for a complete reimbursement of in-patient treatment costs has been eliminated de facto and ultimately through the so called

GKV-Gesundheitsreformgesetz 2000

(Health Reform Act 2000).

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In terms of content, this new regulation can be allocated to a long series of programmatic reforms which can be followed back to the many recommendations made by health economists as early as the 1980’s. All these approaches toward creating a new order have, with respect to in-patient hospital payments, a common and fundamental tendency to replace the cost-covering accounting system, founded on daily rates for hospital beds, through a priceoriented concept, based on a differentiated overall payment according to the particular treatment in question.

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