Diagnosis Related Groups
The rising cost of medical care in the United States has been a concern for quite some time. Beginning in the 1960s with the advent of Medicare, a system has been needed that will balance cost with services provided within acceptable parameters. In 1982, the US Congress placed a cap on operating expenses for each Medicare case treated in a hospital, as a protective measure to insure adequate payment within reasonable limits. A prospective payment system (PPS) was initiated as a result of the cap, whereby hospitals receive a flat rate for each admission based on a calculation of rates determined by the diagnosis (Kahn, et al, 1990). A system whereby the diagnosis is grouped according to services, estimated length of stay and type of technology required for treatment was developed by Robert B. Fetter and John D. Thompson in the early 1980s (Burke, 1992). The diagnostic related groups (DRGs) form the basis for the payment system. This system was originally set up for use with Medicare but has been refined and expanded to include non-Medicare situations in the United States and abroad. Some form of DRGs has been adopted in more than 20 countries, including the United Kingdom, France, Finland, Norway, Taiw
McManus, S.M. Pearson, J.V. (1993). Nursing at a crossroads: Managing without facts. Health Care Management Review, 18(1), 79-90. In an attempt to ensure accuracy and equitable payment, annual revision of the DRC classification system has been instituted. It includes updating the classifications to reflect new diagnosis and treatment procedures, as well as the effects of new technologies in cost. The Health Systems Management Group at Yale University, under a HCFA cooperative agreement, developed a system to assign cases to a DRG based on principal diagnosis, secondary diagnoses, and surgical procedures and the combination of previous classifications to form more relevant and inclusive classifications. The Yale RDRGs also recognize two special groups of cases: medical cases involving early death (within 2 days of admission) and cases requiring tracheostomy procedures. It also expanded the number of categories to 1, 263. (Edwards, et al, 1994). The DRG Cotterill, P., Bobula, J., Connerton, R. (1986, April). Comparison of alternative relative weights for diagnosis-related groups. Health Care Financing Review, 7(3), 37. Besdine, Richard W. (1998, June). Improving health care quality by reimbursement policy. Journal of the American Geriatrics Society, 46(6), 788.
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Approximate Pages = 9 (250 words per page double spaced)
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