Impact of DRG reimbursement system on hospital efficiency: systematic review

Background During the last two decades, most countries including developed and developing have experienced a rapid increase in health care expenditures in general, and hospital expenditures in particular. DRG-based reimbursement systems were introduced to control healthcare and hospital expenditure, increase activity levels and standardize care. This paper reviews the theoretical and empirical evidence on whether DRGs can meet these ambitious objectives. The objective of this study is to systematically review the effect of DRG payment system on hospital efficiency and to find theoretical and empirical evidence that DRGs enhance efficiency and effectiveness in the hospital sector.