The Diagnosis Related Group (DRG) system for health insurance has now been implemented across all public and private hospitals in Dubai, the city’s health authority has confirmed.

Announcing the launch in November last year, Dubai Health Authority’s (DHA) newly introduced classification system – which was brought to the sector beginning February 2020 – is an “internationally vetted billing system” that “uses algorithms to fix base fees for medical procedures”.

The aim of DRG is to streamline payment protocols, “bringing in greater transparency and accountability”.

THE LARGER CONTEXT

DRG reportedly works by accurately calculating the cost of procedures for each insured patient separately, using its algorithm of fixed base fees for medical treatments across the emirate.

For example, rather than a health insurance company paying a hospital for each specific service, it would instead pay a predetermined amount based on the patient. The amount would be calculated based on metrics, such as patient diagnosis and prognosis.

It is hoped that this will not only encourage hospitals and other healthcare enetities to bundle payments – thus providing a more cost-effective experience for patients – but also reduce the cost of healthcare and insurance premiums in the city over time.

Last year, DHA’s Director General, Humaid Al Qatami told Middle East Insurance Review that “medical costs have become a burden to insurers and the establishment of new controls is needed.”

Saleh Al Hashimi, CEO of Dubai Health Insurance Corporation, added that the aim of the DRG was to “ensure quality of service, prevent duplication of health services, reduce medical treatment costs, as well as regulate and control the dispensing of medicines.”

The DRG model is already widely adopted across countries including Canada, Singapore, Hong Kong, Australia and New Zealand.

ON THE RECORD

Humaid Al Qatami explained: “[DRG will] increase efficiency, further improve provision of health care and reduce healthcare costs,” as well as enhance transparency, and monitor quality across hospitals.

“The implementation of DRG will undoubtedly help both providers and payers, and most importantly, it will benefit patients as it will further drive up efficiencies in inpatient care,” Dubai Health Insurance Corporation’s Al Hashimi concluded. “It will help improve quality of care across the spectrum and it will encourage cost reduction, which will help build a robust and dynamic health sector. DRG will provide evidence-based data that can be used to device public health policies with an aim to improve the health and wellbeing of the community.”