The introduction of a German ("German") DRG system (G-DRG) by 01.01.2003 is to improve efficiency and transparency of hospital performance and to terminate the presently implausible variability of costs. For the first time world wide the attempt is undertaken to finance by a DRG-system--supplemented by certain additional charges and rebates--hospital costs completely. Institutions submitted to the psychiatry personnel regulation (PsychPV) are excluded. As the basis for the G-DRG-system self-administration authorities have selected the Australian AR-DRG system. The adjustment to German conditions is an extraordinary challenge: Compatibility must be achieved between the German classification of diagnoses (CGD-10) and procedures (OPS-301) and pertinent coding standards and the Australian classification systems. In the hospitals a unit cost accounting must be established, which at least approximately allows a strictly case-related calculation of actual costs. The relative cost weights of the DRGS and thus in the long run, their prices will be calculated on the basis the costs of a complete sample of cases of a representative subset of hospitals. The full-scale DRG system will confront with new risks. One is the transfer of treatment components and thus costs to Institutions not covered by the DRG system (e.g. rehabilitation hospitals, psychiatry). Thus, psychiatry will be at least indirectly involved. In addition, psychiatric patients will be directly affected if they are treated--possibly due to misallocation--in non-psychiatric institutions (e.g. internal medicine, neurology) or in psychosomatic departments not covered by the PsychPV.