Hospital costs, resource characteristics, and the dynamics of death for hospitalized gastroenterology patients

Abstract

The federal Medicare diagnosis-related group (DRG) hospital payment system has been on-line for 5 yr with no major adverse effects on either access or quality of care. The hospital industry contends that DRGs are underpaying for hospital care, especially for certain types of patients. Analysis of 2,500 gastroenterology patients by outcome (i.e., survivors vs mortalities) demonstrated that the 122 mortalities had a much greater intensity of hospital resource utilization, and generated substantial financial risk under DRG pricing schemes, compared with the 2,378 survivors. Only mortalities that occurred within 1 wk of admission to the hospital were profitable under DRGs. A long hospital length of stay (LOS) for mortalities was very unprofitable (mortalities with more than a 60-day LOS generated $20,210 loss per patient). Emergency gastroenterology admissions who died had greater financial risk under DRGs, compared to nonemergency mortalities. Those mortalities referred to gastroenterology from other clinical services tended to have greater resource utilization and financial risk under DRGs, compared with nonreferred mortalities. These data suggest significant inequities in the current DRG prospective payment system vis-a-vis gastrotenterology mortalities. Predictive variables of greater hospital resource utilization for gastroenterology mortalities include longer hospital lengths of stay, emergency admission, and referral from another clinical service. If equity of DRG payment is not improved by the federal government, certain groups of patients likely to be mortalities may suffer a decline in access and/or the quality of medical care in the future.