Casemix funding in Australia

Casemix funding for hospitals with the use of diagnosis‐related groups (DRGs), which organise patients' conditions into similar clinical categories with similar costs, was introduced in Australia five years ago. It has been applied in different ways and to a greater or lesser extent in different Australian States. Only Victoria and South Australia have implemented casemix funding across all healthcare services. Attempts have been made to formally evaluate its impact,1•2 but they have not met the required scientific standards in controlling for confounding factors. Casemix funding remains a much­ discussed issue. In this Debate , Braithwaite and Hindle take a contrary position, largely to stimulate policy debate; Phelan defends the casemix concept and advocates retaining its best features; and Hanson adds a plea for consumer input.