Modelling the Impact of DRG Billing: Insights from Saudi Arabia’s Health System

The healthcare system in Saudi Arabia is undergoing significant transformation as a part of their 2030 vision. In alignment with this vision, the Council of Health Insurance (CHI) have made national efforts for hospitals to adopt the Diagnosis-Related Group (DRG) billing model.

Edge Health, in collaboration with our partners at Beamtree, modelled the financial implications of this transition by analysing the key drivers of current revenue and projecting the impact of the DRG reimbursement structure on major hospitals in Saudi Arabia.

What We Did

Our approach consisted of two phases; in phase 1, the current state was analysed by identifying the key financial drivers within the Saudi Billing System (SBS). This phase established a baseline by clarifying how revenues and costs are currently generated and managed.

The future state analysis (phase 2) builds on this foundation by exploring potential changes and improvements. It included modelling the financial impact of transitioning to a Diagnosis-Related Group (DRG)–based payment system, as well as identifying opportunities for automation that could support and enhance the clinical coding workforce.

What We Achieved

Through our analytical support, we identified billing trends by benchmarking similar procedures across hospitals, highlighting variations in diagnosis and procedure coding. We also quantified the overall financial impact of transitioning to a DRG-based system and provided recommendations on opportunities to automate coding to improve efficiency and accuracy. Together, these findings have offered valuable insights to inform board-level strategic planning and support their future initiatives.

“Beamtree has worked closely with Edge Health on several initiatives, and we’ve been consistently impressed by their ability to combine technical expertise with a deep understanding of health system priorities. They work flexibly and collaboratively, always with a clear focus on delivering meaningful outcomes for clients.”