Knowledge based regulatory instrument in the Hungarian health sector

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The Hungarian final report of Orientation 3 phase 2 of the KNOW&POL research focuses on a national regulatory tool, namely the DRG system in Hungary.

Knowledge-based regulatory instruments are increasingly widespread forms of public policies. They produce scènes where knowledge and power merge in the policy process. We define knowledge-based regulatory instrument as a mechanism, object, tool, or process specifically concerned with diffusing a particular kind of knowledge (or particular kinds of knowledge) in order to shape the behaviour of actors in a given policy domain (Salamon, 2002, 29). It is important that the knowledge-based regulatory tool is not only knowledge-based but also knowledge-oriented: beyond the appropriation of certain kinds of knowledge it also produces other kinds of knowledge (Specification of O3: 4).

This report analyses the genealogy and the functioning of a knowledge-based regulatory tool in the Hungarian health sector, namely the Disease Related Groups (DRG [HBCS]) system of hospital financing.

DRG system is a performance based regulatory tool. The general idea of the system is that illnesses and injuries are grouped together if they are medically akin and require approximately equal expenditure. In the course of medical practice, these groups are used for the documentation of the medical interventions. A given case is categorized according to a classification algorithm based on the diagnosis of the illness or injury (based on the International Classification of Diseases) or on the WHO code of the performed surgery. The costs of each DRG group are defined in the course of a cost study that involves several hospitals and thousands of patients. In the course of the study, every cost of a medical procedure is listed (from medical gloves to the wage of the attending medical staff). This way it is believed to be adequate to document the extremely complex medical practice from the perspective of financing. Thus DRG is used to document, to control and to rationalize the allocation of treatment costs, so hereby the performance-based funding is realized.

We investigate the different interests, values, and views of the groups and individuals involved in the conception and promotion of the instrument and concentrate on the knowledge used to develop it and justify its relevance. The report is based on semi-structured interviews and on the analysis of the key documents, as well as on a fieldwork on the functioning of the system, where negotiated interactive observation was conducted in a teaching hospital.

ERÖSS Gábor, FERNEZELYI Bori, KOLTAI Júlia & LEVENDEL Sára (2010), From the Engagement to the Divorce of Knowledge and Policy – DRG: a knowledge-based regulatory instrument in the Hungarian health sector.

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  • SALAMON L. M. (ed) (2002), The Tools of Governance. A Guide to the New Governance, Oxford: Oxford University Press.

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