Case Mix, Costs, and Outcomes

TLDR

The study aimed to assess the potential consequences of prospective payment on university hospitals. Researchers analyzed 2,025 admissions to a university hospital’s faculty and community services, comparing case mix, costs, and mortality. Faculty service patients incurred 11% higher costs after DRG adjustment, especially for diagnostic expenses, and had significantly lower adjusted mortality, while matched high‑risk patients showed equal 9‑month survival, indicating that the impact of prospective payment on cost and outcomes warrants close monitoring. Citation: N Engl J Med 1984; 310:1231–7.

Abstract

Abstract To gain insight into the possible consequences of prospective payment for university hospitals, we studied 2025 admissions to the faculty and community services of a university hospital, measuring differences in case mix, costs, and mortality in the hospital. The faculty service had more of the patients with costly diagnoses, but even after adjustment for diagnosis-related groups (DRGs), costs were 11 per cent higher on the faculty service (95 per cent confidence limits, 4 to 18 per cent). The percentage differential was greatest for diagnostic costs. The differential was particularly large — 70 per cent (95 per cent confidence limits, 33 to 107 per cent) — for patients with a predicted probability of death of 0.25 or greater. The in-hospital mortality rate was significantly lower on the faculty service after adjustment for case mix and patient characteristics (P<0.05); the difference was particularly large for patients in the high-death-risk category. Comparision of a matched sample of 51 pairs of admissions from the high-death-risk category confirmed the above results with respect to costs and in-hospital mortality, but follow-up revealed that the survival rates were equal for the two services at nine months after discharge. The effect of prospective payment on the cost of care will be closely watched; we conclude that it will also be important to monitor the effect on outcomes, including hospital mortality rates. (N Engl J Med 1984; 310:1231–7.)