Hospital utilization and reimbursement method in Brazil.

Urban private hospital discharges in Brazil increased enormously during the last decade. Several measures were taken in an effort to slow the rate of increase in hospital admissions and the escalation of hospital costs, which were out of control by the end of the last decade. The introduction of a new case-based reimbursement method, late in 1983, not only contributed to increased hospitalizations, but to changed hospital case mix, as private hospitals shifted from more costly to less costly patients. This occurred especially in the most developed areas of the country, where the concentration of profit-making hospitals is very high. The case-based prospective payment method can be seen as a good managerial tool for use in comparing hospital performance. However, it seems not to be a good mechanism for controlling health care expenditures, especially when profit-making hospitals dominate the provision of hospital care. Any decrease in hospitalization by private hospitals in Brazil has been caused by the severe economic recession, which hit the Brazilian economy hard, and by the shift in hospital admissions from private to public hospitals, not by the introduction of the new reimbursement method which has changed the unit of payment from 'patient day' to case or procedure.