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Weighting case mix groups: the fatal flaw in resource intensity weights

C K Botz

    Healthcare Management Forum
    |January 4, 1990
    PubMed

    Insights

    Resource Intensity Weights (RIWs) for Canadian Case Mix Groups (CMGs) do not accurately reflect costs, as demonstrated by graphical analysis. Using unadulterated American Diagnosis Related Groups (DRGs) may be a viable alternative for Canadian healthcare institutions.

    Area of Science:

    • Health Services Research
    • Health Economics
    • Healthcare Management

    Background:

    • Resource Intensity Weights (RIWs) are used for Canadian Case Mix Groups (CMGs).
    • RIWs are calculated using American Diagnosis Related Group (DRG) weights and Canadian average-length-of-stay data.
    • Concerns exist regarding the accuracy and Canadianization of these RIWs.

    Purpose of the Study:

    • To evaluate the relationship between RIWs and CMG costs in Canadian healthcare.
    • To demonstrate the deficiencies in the current RIW calculation method.
    • To propose alternative approaches for case mix analysis and fiscal planning in Canadian healthcare.

    Main Methods:

    • Analysis of Resource Intensity Weights (RIWs) for Case Mix Groups (CMGs).
    • Utilized American Diagnosis Related Group (DRG) weights and Canadian average-length-of-stay data.
    • Employed simplified graphical examples to illustrate the relationship between RIWs and CMG costs.

    Main Results:

    • The calculation of RIWs does not accurately "Canadianize" DRG weights, leading to randomization.
    • A significant lack of correlation was demonstrated between RIWs and actual CMG costs.
    • The study highlights the deficiencies in using current RIWs for accurate cost allocation.

    Conclusions:

    • The concept of weighted CMGs is fundamentally sound, but current RIW methodology is flawed.
    • Canadian healthcare institutions may consider using unadulterated American DRGs for case mix analysis and fiscal planning.
    • Implementation of Management Information System (MIS)-level reporting and a robust domestic database are needed for improved Canadian case mix analysis.

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