Payment policy for chemotherapy in public hospitals: a case for splitting DRG 780/R63Z

Area of Science:

• Health economics
• Medical classification systems
• Oncology

Background:

• The Australian casemix classification system groups patients based on resource use.
• Diagnosis Related Group (DRG) 780 currently encompasses various chemotherapy cases.
• Assessing the appropriateness of this classification is crucial for accurate cost allocation.

Purpose of the Study:

• To evaluate the suitability of the existing chemotherapy classification within the Australian casemix system.
• To determine if DRG 780 accurately reflects resource utilization across different cancer types.

Main Methods:

• A secondary analysis of patient-level data from Victorian hospitals (1994-1997) was conducted.
• The Chi-squared Automatic Interaction Detector (CHAID) algorithm was employed to analyze cost variations.
• Data from DRG 780 cases were examined to identify significant cost differences.

Main Results:

• Significant cost disparities were identified among different cancer types within DRG 780.
• Colon cancer (mean $289), breast cancer (mean $481), lymphatic cancer (mean $605), and leukemia (mean $1,118) showed distinct cost profiles.
• These cost differences met statistical criteria for splitting the existing DRG.

Conclusions:

• The study recommends splitting DRG 780 into five new groups: colon, breast, lymphatic cancers, leukemia, and 'other cancers'.
• This revised classification is expected to reduce variance in cost explanation by approximately 10%.
• Length of stay is an unreliable proxy for resource utilization, particularly for same-day DRGs, necessitating a shift in casemix development strategies.