Related Experiment Videos
Modified DRGs as evidence for variability in patient severity
B J McNeil1, G F Kominski, A Williams-Ashman
1Department of Preventive Medicine, Harvard Medical School, Boston, MA.
Medical Care
|January 1, 1988
Summary
Modifying Diagnosis Related Group (DRG) codes can better reflect patient complexity and costs. Some higher-cost patient groups are more common in teaching hospitals, impacting DRG payments.
Area of Science:
- Health Services Research
- Medical Informatics
- Healthcare Management
Background:
- Diagnosis Related Groups (DRGs) are used for case-mix classification and reimbursement.
- Current DRG definitions may not fully capture patient complexity and associated costs.
- Variations in patient severity within DRGs can lead to financial disparities.
Purpose of the Study:
- To investigate if modifications to ICD-9-CM code combinations within DRGs can better define patient complexity.
- To assess the impact of these potential modifications on cost variations.
- To explore the implications for DRG-based payment systems.
Main Methods:
- Analysis of 150 common medical and surgical DRGs from a teaching hospital.
- Identification of 41 DRGs with suspected subgroups of varying patient severity by clinical experts.
- Validation using a national dataset to identify significant differences in standardized charges.
Main Results:
- Significant differences in standardized charges were found in 24 of the 41 studied DRGs.
- Higher cost subgroups were disproportionately represented in major teaching hospitals for 11 of these 24 DRGs.
- These findings indicate substantial cost variations within existing DRG classifications.
Conclusions:
- Clinical modifications to a limited number of DRGs can create more meaningful case-mix groupings.
- DRG payment policies should consider the distributional differences in higher-cost subgroups.
- Refining DRGs is crucial for accurate reimbursement and resource allocation in healthcare.