The Impact of Diagnosis-Related Groups on the Cost of Hospitalization for End-Stage Renal Disease Patients at Rhode Island Hospital From 1987 to 1990

Abstract The introduction of diagnosis-related groups (DRGs) for the reimbursement of hospital costs in the Medicare population made no provisions to identify end-stage renal disease (ESRD) patients. To assess the impact of the DRGs on ESRD patients, we prospectively evaluated all hospitalizations (901) at the Rhode Island Hospital from July 1987 through April 1990 among a chronic hemodialysis population of 587 patients. The compiled data on length of hospital stay, cost per day, and total cost were compared with the accepted allowances as defined by the DRG codes assigned to the admissions. The mean values and comparisons were length of stay, 10.2 ± 21 days (ESRD) versus 9.7 ± 3.6 days (DRGs), P=0.44; cost per day, $1,240 ± $685 (ESRD) versus $671 ± $897 (DRGs), P=0.0001; and total cost, $9,660 ± $17,170 (ESRD) versus $6,815 ± $8,872 (DRGs), P=0.0001, a difference of $2,275 per admission. The increase in daily, and thus total, costs was primarily due to the use of supplies, medications, laboratory procedures, and transfusion services. It appears from our data that the DRGs do not adequately reflect the cost of caring for ESRD patients with the same DRGs as non-ESRD patients because of increased demand for anCillary services. If these observations are confirmed, a reevaluation of the DRG process as it relates to ESRD patients is warranted.