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Critical Evaluations of the French Health Care Accounting Indicators: The Use of DRGs

Author: DANIEL SIMONET and YAS ALKAFAJI
Published in PAQ, Vol. 41 No. 3

Responding to legitimate public demand for a more effective government, and pressed by EU authorities to achieve fiscal balance, and to reorient the economy toward an export model (Lux, 2015), French authorities embraced New Public Management (NPM). The aims were: to modernize the public sector; to introduce some elements of economic performance in the administration; and to enhance accountability (Bezes, 2008). The health care sector was not spared. Diagnostic-Related Groups (DRG) was one of the new accounting tools designed to effect changes in this sector. The purpose of this paper is to critically evaluate the appropriateness of the DRG system and the challenges associated with its implementation in the health system. We evaluate the impact of DRGs using the four evaluation dimensions of the World Health Organization: efficiency, quality, relevancy and equity. Our findings indicate that although DRGs contributed to improving the relevance of the system and its efficiency (the ‘reality axis’ of WHO model), it has failed to meet what the society expects of an ‘ideal’ health care system: an increase in the quality of care and the promotion of equity between public and private care providers (the ‘ideal axis’ of the WHO model).

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