Determinants of hospital length of stay

An example of the inefficiency of cost-based reimbursement is that wide variations were observed between hospitals and between regions in the cost of treating similar diagnoses, with no apparent differences in quality. To correct these variations, the Tax Equity and Fiscal Responsibility Act and its concomitant prospective payment system based on DRGs was implemented. However, wide variations continued to exist among hospitals and regions in the United States. The attempt by the medical profession to refine the prospective payment system by severity adjustments has received lukewarm support. The work by Halloran et al on the relationship between nursing diagnosis and length of stay shows some promise. Studies on nursing intensity have produced mixed results. Recently, the Prospective Payment Assessment Commission decided to discontinue efforts to develop nursing intensity adjustments for DRG weights. Additionally, institutional characteristics, except for discharge planning programs, and patient characteristics have exhibited mixed results in attempts to explain hospital length of stay. Concern over continuing variations that DRGs and their proposed adjustments have been unable to correct led to the formation of the Agency for Healthcare Policy and Research, which was brought about by the Omnibus Budget Reconciliation Act of 1989. This agency seems to believe that practice patterns offer the greatest hope of reducing excessive hospital lengths of stay and concomitant costs.