Adjusting the Costing/Pricing Systems of Public Health Units in Times of Emergency Health Crises: The Case of Greece


The aim of this research was to examine the costing / payment system applicable to public hospitals in the period before Covid-19 and compare it with adjustments implemented by the Greek Government because of Covid-19, both in payment methods and in the execution of its budgets. In addition, we tried to record the burden on hospitals with the extra costs caused by Covid-19 and how these affected the regular execution of their budget. Quantitative data were collected from a university hospital, which is one of 13 coronavirus reference centers in Greece. Data were collected from the Finance, Supply and Revenue pricing departments. All Greek hospitals have adopted Closed Consolidated Hospitalization – Diagnosis Related Groups (KEN- DRGs) as the pricing system, based on the Australian DRGs. The findings revealed that, due to the inability of the KEN system to readily adjust to a health crisis and due to a lack of time to adapt to the new circumstances, Greek hospitals were called to implement a per-diem reimbursement system as a Covid-19 case pricing system. It was also found that the hospital, in order to keep providing its services for Covid-19 patients at the same pace, was required to incur a large amount of expenses. According to the results, the reimbursement system of public hospitals in no way reflects the actual Covid-19 costs and a reliable cost accounting system for calculating the actual cost per Covid-19 patient (based on actual costs and hospitalization data) is needed. Additionally, there is an evident and urgent need for optimization of the KEN system and its evolution into a more reliable costing/pricing system, such as that of the DRGs.

Keywords: health costing, Public Health Units, Diagnosis Related Groups (DRGs), budget, health economics, coronavirus (Covid-19)

[1] Quentin W, Albreht T, Bezzina A, et al. Adjusting hospital inpatient payment systems for Covid-19. Eurohealth. 2020;26(2):88-93.

[2] Cylus J, Ginneken E. How to respond to the Covid-19 economic and health financing crisis? Eurohealth. 2020;26(2):25-33.

[3] Rosenbaum L. The untold toll — The pandemic’s effects on patients without Covid-19. New England Journal of Medicine. 2020;382(24):2368-2371.

[4] De Vincentiis L, Carr R, Mariani M, Ferrara G. Cancer diagnostic rates during the 2020 ‘lockdown’, due to COVID-19 pandemic, compared with the 2018–2019: An audit study from cellular pathology. Journal of Clinical Pathology. 2020;74(3):187-189.

[5] Maringe C, Spicer J, Morris M, et al. The impact of the COVID-19 pandemic on cancer deaths due to delays in diagnosis in England, UK: A national, population-based, modelling study. Lancet Oncology. 2020;21(8):1023-1034.

[6] Leister JE, Stausberg J. Comparison of cost accounting methods from different DRG systems and their effect on health care quality. Health Policy. 2005;74(1):46-55.

[7] Chilingerian J. The globalization of managerial innovation in health care. Kimberly J, De Pouvourville G, D’Aunno T, editors. Cambridge: Cambridge University Press; 2008. Origins of DRGs in the United States: A technical, political and cultural story; p. 4-33.

[8] Davies RH, Westfall G. Reimbursement under DRGs: Implementation in New Jersey. Part 1. Health Services Research. 1983;18(2):233-244.

[9] Cylus J, Irwin R. The challenges of hospital payment systems. Euro Observer. 2010;12(3):1-3.

[10] Pirson M, Schenker L, Martins D, Dung D, Chale JJ, Leclercq P. What can we learn from international comparisons of costs by DRG? The European Journal of Health Economics. 2013;14(1):67-73.

[11] Tan SS, Geissler A, Serden L, Heurgren M, Martin van Ineveld B, Ken Redekop W. DRG systems in Europe: Variations in cost accounting systems among 12 countries. European Journal of Public Health. 2014;24(6):1023-1028.

[12] Kaitelidou D, Galanis P, Siskou O, Karagouni H, Konstantopoulou O. Study of the implementation of DRG internationally: Systematic review results [Internet]. Greece: Center for Health Services Management and Evaluation, Department of Nursing, University of Athens; 2020. Available from: p-content/uploads/ΜΕΛΕΤΗ-ΕΦΑΡΜΟΓΗΣ-ΤΟΥ-ΣΥΣΤΗΜΑΤΟ-DRG-ΔΙΕΘΝΩΣ.pdf

[13] Busse R, Quentin W. Diagnosis-related groups in Europe: Moving towards transparency, efficiency and quality in hospitals. Busse R, Geissler A, Quentin W, Wiley, M, editors. Berkshire: McGraw Hill, Open University Press; 2011. Moving towards transparency, efficiency and quality in hospitals: Conclusions and recommendations; p. 149-171.

[14] Böcking W, Ahrens U, Kirch W, Milakovic M. First results of the introduction of DRGs in Germany and overview of experience from other DRG countries. Journal of Public Health. 2005;13(3):128-137.

[15] Brannen TJ. DRG-based per diem payment system matches costs more accurately. Journal of the Healthcare Financial Management Association. 1999;53(4):42-46.

[16] Closed consolidated hospitalization costs – KEN and per diem payment in NHS (GG 1702/B’/1-8-2011) [Internet]. Joint Ministerial Decision No. Y4a/oik.85649; 2011. Available from: args=5C7QrtC22wFYAFdDx4L2G3dtvSoClrL8Mdk-Qqj2NafnMRVjy fnPUeJInJ48_97uHrMts-zFzeyCiBSQOpYnTy36MacmUFCx2ppFvBej56Mmc8Qdb8ZfRJqZnsIAdk8L v_e6czmhEembNmZCMxLMtVip5qLoBrdtw8hlioA-aXuyAX85kJZAsaavmKEMEPcO

[17] The implementation of closed consolidated hospitalization costs – KEN [Internet]. Hellenic Ministry of Health; 2011. Available from: /articles/ken-eswteriko/712-odhgies-syxnes-erwthseiserwthseis

[18] Polyzos N, Karanikas H, Thireos E, Kastanioti C, Kontodimopoulos N. Reforming reimbursement of public hospitals in Greece during the economic crisis: Implementation of a DRG system. Health Policy. 2012;109(1):14-22.

[19] The implementation of DRGs in Greece [Internet]. Documentation and Costing Centre of Health Services – DRGs Greek Institute; 2020. Available from: ssias_conferences_content/presentations/hospital_medicine/2019/
giannis_mastrogiannis_hospitalm edicine19.pdf

[20] Organization for Economic Cooperation and Development (OECD). Fiscal sustainability of health systems: Bridging health and finance perspectives [Internet]. Paris: OECD Publishing; 2015.

[21] Organization for Economic Cooperation and Development (OECD), European Observatory on Health Systems and Policies. State of health in the EU. Greece: Health profile 2017 [Internet]. Paris: OECD Publishing; 2017.

[22] The implementation of General Government Accounting Framework (GG 103/A’/13-6-2018) [Internet]. Presidential Degree No 54; 2018. Available from: tml?args=5C7QrtC22wG3UHk-ZeQumndtvSoClrL85SHhfC--biJ5MXD0LzQTLWPU9yLzB8V68knBzL CmTXKaO6fpVZ6Lx3UnKl3nP8NxdnJ5r9cmWyJWelDvWS_18kAEhATUkJb0x1LIdQ163nV9K--td6SIu UMDz3LkYDOAGhZjeKiSrj8mVztbGDsZRyY7Y5PmWAzD