Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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285. To ask the Minister for Health the extent to which the diagnostic related groupings system is employed in the health service here; if there is scope to extend this system; the expected efficiencies and savings which could be expected from same; and if he will make a statement on the matter. [31434/13]

James Reilly (Dublin North, Fine Gael)
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Diagnosis Related Group (DRG) systems classify patients into distinct groupings which are clinically similar and consume similar health resources. Irish hospitals use the AR-DRG grouping system which groups each hospital’s inpatient and daycase workload into 698 DRGs. Until this point, the main use of the DRG system has been to adjust the budget allocations of acute public hospitals by up to 3% in line with the complexity of their casemix and their relative performance under the Casemix System. DRGs have also been used as a tool to assist with planning as well as monitoring and assessing performance within the acute hospital sector.

The draft Money Follows the Patient Policy Paper, which I published for consultation on 15 February last, proposes the introduction of a new model of funding for public hospital care. This involves changing from the current inefficient system of block grant budgets to a new approach where hospitals are paid for the actual level of activity they undertake. Introduction of MFTP effectively means that hospitals will be funded on the basis of the quantity and quality of the services they deliver to patients and not the size of last year’s budget. The new approach will be facilitated through the introduction of a prospective case-based payment system using the existing DRG grouping system.

Encouraging hospitals to use the resources at their disposal more efficiently is one of the central objectives of the MFTP system. A recent pilot project, which implemented a MFTP model in the orthopaedic speciality, showed the positive impact that MFTP can have through productivity gains. Introduction of MFTP resulted in a two day reduction in average length of stay for relevant DRGs and a 45% increase in day of surgery admission rates, while not raising any quality concerns.

It is proposed that MFTP will be rolled-out in shadow form in 2013 ahead of full phased implementation from 2014.