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Analyzing pharmacy charges using DRGs.

H F Catania, O M Ibrahim, S L Guasco

American Journal of Hospital Pharmacy

|May 1, 1984

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Analyzing pharmacy charges by diagnosis-related groups (DRGs) revealed significant cost variations. While high hospital charges correlated with length of stay, pharmacy costs did not directly align, suggesting DRG analysis is a practical approach for prioritizing pharmacy resources.

Area of Science:

Health Economics
Hospital Administration
Pharmacy Management

Background:

Pharmacy charges represent a significant component of hospital expenditures.
Understanding cost drivers within hospital departments is crucial for financial management.
Diagnosis-Related Groups (DRGs) provide a framework for classifying patient care and associated costs.

Purpose of the Study:

To analyze pharmacy charges within a community hospital setting.
To identify the most expensive Diagnosis-Related Groups (DRGs) impacting pharmacy costs.
To explore the relationship between pharmacy charges, hospital charges, and length of stay.

Main Methods:

Retrospective analysis of patient data from January 1, 1983, to August 31, 1983.
Categorization of 10,550 patients into 390 DRGs.

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Compilation of pharmacy and hospital charges, patient numbers, and length of stay for the 20 most expensive DRGs.

Main Results:

The 20 most expensive DRGs incurred mean pharmacy charges of $83,457 per DRG, with an average of 140 patients.
DRG 107 (coronary bypass) and Major Diagnostic Category (MDC) 5 (circulatory system disorders) exhibited the highest pharmacy charges.
Pharmacy charges as a percentage of total hospital charges varied widely, from 4.1% to 32% for the top 20 DRGs.

Conclusions:

Pharmacy charge analysis by DRG offers a viable method for establishing departmental priorities in the absence of detailed cost-per-case data.
High hospital charges and length of stay did not consistently correlate with high pharmacy charges.
Further investigation into actual departmental cost-per-DRG data is recommended for more precise financial management.