Reimbursement systems, organisational forms and patient selection: Evidence from day surgery in Norway

Cream skimming can be defined as the selective treatment of patients that demand few resources while providing high economic refunds. We test whether cream skimming occurs after the introduction of DRG-based activity-based financing (ABF) in Norway in 1997 and if the problem further increased after the 2002 organizational reform when hospitals were turned into trusts. The DRG-system offers the same economic reimbursement for patients classified within day-surgical DRGs irrespective of whether the patient receives same-day treatment or in-patient care over several days. This provides potential for cream skimming and allows us to investigate cream skimming within the actual diagnoses. Patient data from the period 1999-2005 is analyzed. Waiting times are used as indicators of patient selection and analyzed as a function of severity within each diagnosis, controlling for age and gender of the patient, as well as institutional and time-dependent variables. The analysis gives some evidence of cream skimming in the first period of ABF, in particular within the lighter orthopaedic diagnoses. However, cream skimming does not increase after the 2002 organizational reform but is stable, and for some DRGs even reduced. The study indicates that cream skimming may occur if reimbursement systems are not particularly sophisticated. Softening of budget constraints after the hospital reform of 2002 may explain why cream skimming does not increase after the reform. However, further investigation into this mechanism is needed.