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Related Experiment Videos

Prospective payment for psychiatry--feasibility and impact.

D N Schumacher, M J Namerow, B Parker

    The New England Journal of Medicine
    |November 20, 1986
    PubMed
    Summary
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    Diagnosis-related groups (DRGs) poorly predict psychiatric hospital stays and costs. Alternative models also showed limited predictive power, potentially creating financial disparities and inappropriate patient care incentives.

    Area of Science:

    • Psychiatry
    • Health Services Research
    • Health Economics

    Background:

    • Psychiatric hospitals are exempt from the prospective payment system (PPS) based on diagnosis-related groups (DRGs).
    • Existing DRGs for psychiatric patients have not been rigorously evaluated for their predictive accuracy regarding length of stay and costs.

    Purpose of the Study:

    • To assess the predictive ability of the 15 proposed psychiatric DRGs for hospital length of stay and costs.
    • To develop and compare alternative patient grouping systems for improved prediction of length of stay.

    Main Methods:

    • Retrospective analysis of 8816 randomly selected psychiatric hospital patient charts from 32 US psychiatric hospitals.
    • Evaluation of the 15 psychiatric DRGs and development of alternative grouping models based on diagnostic categories, transfer status, age, and comorbidities.

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    Main Results:

    • The 15 psychiatric DRGs explained only 3.9% of the variance in patient length of stay.
    • The best alternative grouping model, incorporating diagnostic categories, transfer status, age, and comorbidities, explained only 7.8% of the variance in length of stay.
    • All tested models demonstrated significant financial disparities, indicating potential for inappropriate incentives in patient care.

    Conclusions:

    • Diagnosis-related groups (DRGs) are inadequate for predicting length of stay and costs in psychiatric hospitals.
    • Factors beyond diagnosis are better predictors of length of stay, but current grouping models create financial risks and misaligned incentives.
    • The findings suggest that DRG-based payment systems may not be suitable for psychiatric care without substantial modification.