Impact of an All-Inclusive Diagnosis-Related Group Payment System on Inpatient Utilization

Terri J. Menke; Carol M. Ashton; Nancy J. Petersen; Fredric D. Wolinsky

doi:10.1097/00005650-199808000-00003

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Impact of an All-Inclusive Diagnosis-Related Group Payment System on Inpatient Utilization

Journal article

Peer reviewed

Impact of an All-Inclusive Diagnosis-Related Group Payment System on Inpatient Utilization

Terri J. Menke, Carol M. Ashton, Nancy J. Petersen and Fredric D. Wolinsky

Medical care, Vol.36(8), pp.1126-1137

08/01/1998

DOI: 10.1097/00005650-199808000-00003

PMID: 9708587

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Abstract

Objectives. Although case-based payment is one of the main reimbursement mechanisms for hospitals, little is known about its effects in the general population. Prior studies have focused on Medicare or on all-payer systems in particular states. This study estimates the effect of a prospective payment system based on diagnosis-related groups (DRGs) nationwide in the Department of Veterans Affairs. Methods. Multiple regression analysis was used to estimate the effect of Department of Veterans Affairs's diagnosis-related group system separately for 22 diagnoses. The dependent variables were length of stay, inpatient days per patient, and discharges per patient. Covariates included patient, hospital, and area characteristics. Results. Department of Veterans Affairs's diagnosis-related group system reduced lengths of stay and inpatient days per patient. The largest impacts were for the psychiatric diagnoses and several surgical procedures. The magnitudes of the effects were generally moderate. Department of Veterans Affairs's case-based system had a negligible effect on discharges per patient. Conclusions. Per case reimbursement is a potentially useful tool for improving the efficiency of inpatient care for all types of diagnoses and age groups. The effect may be larger than estimated here because of institutional barriers and caps on financial impact.

Diagnosis related groups

International Statistical Classification of Diseases

Length of stay

Medical procedures

Medicare

Payment systems

Psychiatric hospitals

Substance abuse

Surgical procedures

Vascular surgical procedures

Details

Title: Subtitle: Impact of an All-Inclusive Diagnosis-Related Group Payment System on Inpatient Utilization
Creators: Terri J. Menke - Veterans Health Administration
Carol M. Ashton - Academic Institute
Nancy J. Petersen - Michael E. DeBakey VA Medical Center
Fredric D. Wolinsky - Saint Louis University
Resource Type: Journal article
Publication Details: Medical care, Vol.36(8), pp.1126-1137
Publisher: J. B. Lippincott-Raven Publishers
DOI: 10.1097/00005650-199808000-00003
PMID: 9708587
ISSN: 0025-7079
eISSN: 1537-1948
Language: English
Date published: 08/01/1998
Academic Unit: Health Management and Policy
Record Identifier: 9984364427502771

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