Development of a simulation program for estimating hospital incomes under the prospective payment system

A prospective payment system based on diagnosis procedure combination (DPC/PPS) was introduced to acute care hospitals in Japan in April 2003. In order to increase hospital income, hospitals must shorten the average length of stay (ALOS) and increase the number of patients. We constructed a simulation program for evaluating the relationships among ALOS, bed occupation rate (BOR) and hospital income of hospitals in which DPC/PPS has been introduced. This program can precisely evaluate the hospital income by regulating the ALOS and the number of patients for each DPC. By using this program, it is possible to predict the optimum ALOS and optimum number of inpatients for each DPC in order to increase hospital income.