Reducing low value services in surgical inpatients in Taiwan: Does diagnosis-related group payment work?

Reducing low-value care is a top priority in health care. However, how prospective payment methods such as diagnosis-related group (DRG) payment scheme reduce the use of low-value services is unclear. This study aimed to assess frequency of low-value preoperative testing services among surgical inpatients over time and to investigate whether the 2010 Tw-DRG policy has reduced utilization of these services under the National Health Insurance program in Taiwan. The nationwide National Health Insurance claims data in Taiwan from 2008 to 2013 were used. The difference-in-differences (DID) method was adopted. Utilization of three low-value preoperative testing services (chest x-ray, echocardiogram, and stress testing) were assessed. The prevalence of the three preoperative tests ranged from 0.13 per 100 admissions (preoperative stress testing) to 78.12 per 100 admissions (preoperative chest x-ray). Following the implementation of the Tw-DRG policy, the predicted probability of low-value care use was significantly reduced from 67.91% to 64.93% in the DRG group but remained relatively stable in the comparison group (from 69.44% to 68.43%) in 2010. The use of three selected preoperative tests had only a minor temporary reduction in 2010, but later increased over time. The 2010 Tw-DRG policy did not significantly moderate the growth of low-value preoperative use. Hospital financial incentives alone may be insufficient for reducing the provision of low-value care.