What Was Revolutionary About DPC?

What made DPC revolutionary was not simply the introduction of bundled payment. The major change was that it made acute inpatient care comparable across hospitals using a standardized nationwide classification system.

Under fee-for-service payment, medical fees are accumulated based on individual services performed, such as tests, medications, procedures, and surgeries. However, because the diseases and severity of patients differ from hospital to hospital, simply comparing medical costs or lengths of stay makes it difficult to properly evaluate differences between hospitals.

DPC classifies patients into standardized diagnosis groups based on factors such as diagnoses, surgeries and procedures, and comorbidities. This makes it possible to compare length of stay, patterns of care, and healthcare resource utilization across hospitals for similar groups of patients.

In other words, one of the major contributions of DPC was to make it possible to view healthcare not merely as an “aggregation of medical services,” but as “data that can be compared by patient group.”

Comparison	Fee-for-Service	DPC
Basic unit	Medical service	Patients classified into diagnosis groups
Primary focus	What was performed and how many times	What kind of care was provided to what kind of patient
Comparison across hospitals	Simple comparison is difficult because patient populations differ	Easier to compare using the same diagnosis groups
Comparison of length of stay	Separate from the calculation of medical fees	Can be compared and analyzed by diagnosis group
Comparison of healthcare resources	Tracks services performed individually	Enables comparison of resource utilization among similar patient groups
Relationship to reimbursement	Fees are accumulated for each service	DPC/PDPS also uses the classification for bundled payment