Measuring severity of illness to predict patient resource use within DRGs

We describe a new Severity of Illness Index which predicts patient resource use within DRGs and within broad diagnostic categories. Resource use is defined by total charges, length of stay, laboratory charges, radiology charges, and routine charges. Within broad diagnostic categories, the Index explains much more variation in resource utilization than do other case mix grouping methods such as DRGs, generalized patient management paths, and staging groups. Within DRGs, the Index also predicts much of the variation in resource use. We discuss use of the Index to price cases and predict resource use in a hospital.