James D. Chesney

The Risk-Adjusted Mortality Index. A new measure of hospital performance.

The Commission on Professional and Hospital Activities (CPHA) developed the Risk-Adjusted Mortality Index (RAMI), a method for comparing hospital death rates using existing abstract or billing data. The method is comprehensive insofar as it includes all payers and all types of cases except neonates. RAMI was designed to differentiate among admissions on the basis of the patient characteristics that increase or reduce the risk of dying in the hospital. Using a large national data base, risk factors were determined empirically within each of 310 clusters based on diagnosis-related groups (DRGs). The model was very effective at predicting risk-adjusted outcomes, with a correlation of 0.98 between actual and predicted deaths in a sample of 300 hospitals. RAMI appears to be a powerful tool for using existing data to monitor changes over time in hospital death rates.

The Effect of PPS on Hospital Product and Productivity

The results suggest that Prospective Payment System (PPS) prompted a reduction in the proportion of Medicare patients that were discharged, for whom the hospital considered the episode of care to be completed. The results also show a reduction in the proportion of patients discharged dead. When controlling for patient type, the results support the findings, but the magnitude of the change that might be attributed to PPS is somewhat smaller. Proportional changes in the input measures for all patients were next considered. The results indicate that fewer diagnostic tests, fewer laboratory tests, and fewer x-rays were used in 1984. Laboratory tests showed the most dramatic decrease. LOS decreased, but the drug input remained fairly constant. A productivity index that reflects the change in the input measure while controlling for patient type was developed. The results provide strong evidence of a productivity increase in all products for Medicare patients. The drug input did not contribute to the productivity increase. The 50 most frequent DRGs for Medicare patients were examined separately for productivity changes by product. The results further support the findings of an increase in productivity.

The measurement of mortality: A risk-adjusted variable time window approach

This paper describes the development of risk-adjusted mortality indices (RAMI) using 1985 MEDPAR data from 657 hospitals. The RAMI methodology is adopted from the Commission on Professional and Hospital Activities, however both inhospital and post-discharge deaths are counted within time windows that vary by clinical condition. Five different RAMI measures (expected deaths/observed deaths) are developed, compared, and aggregated into various hospital characteristic strata. These measures vary by which discharge is held responsible for deaths within a time window, and whether or not inhospital deaths that occur beyond the time window are included. The RAMIs using varying time windows are compared with the RAMIs based upon inhospital deaths only. The inhospital RAMI was higher for the nonteaching hospitals (.95) as compared with the major and minor teaching institutions (.91 and .89). The RAMIs using the varying time windows, on the other hand, tend to be higher for the teaching institutions (e.g., 1.07 for major teaching hospitals; 0.99 for nonteaching hospitals).

Profitable and Unprofitable DRGs: The Implications for Access

Given a choice, hospitals would prefer to admit a patient with the potential to contribute to an accounting profit and prefer not to admit a patient with the potential to contribute to an accounting loss. It is suggested that if all hospitals found the same DRGs to be unprofitable, access to inpatient care would be denied those patient types. A set of 509 hospitals was stratified according to bedsize, Medicare load, type of control, teaching status and geographic location. The 10 most and 10 least profitable DRGs were identified for each hospital category and a Spearmans rank order correlation was used to determine the similarity or dissimilarity across hospital category. The results indicate that the more alike hospitals are in terms of bedsize, Medicare load and teaching status, the more alike are the DRGs that are determined to be unprofitable (or profitable). Conversely, the less alike they were on these characteristics, the less alike were the unprofitable (or profitable) DRGs. There were no differences evident when the hospitals were classified according to type of control or geographic location. These results are generally encouraging in terms of potential access but disturbing in terms of possible further financial threat to rural hospitals.

Should Drg Assignment Be Based on Age

The present Medicare Diagnosis Related Group (DRG) classification system contains 95 DRG pairs, where one DRG of the pair contains patients within a distinct diagnostic category who are under 70 years of age with no comorbidities or complications (CCs). The other DRG of the pair contains patients in the same diagnostic category who are over 69 or who have CCs. This study examines whether it is appropriate for reimbursement purposes to group those patients who are 70 years of age or older but have no CCs with patients who have CCs. Our findings show that age alone, in the absence of CCs, increases length of stay and cost of care only slightly. In fact, using only CCs as a classification variable reduces the within-group variance more than the present classification based on both age and CCs. Therefore, it is inappropriate to group Medicare patients who are older than 70 years of age without CCs with Medicare patients who have CCs.

The Impact of Diagnosis Related Group Profitability on the Skimming and Dumping of Psychiatric Diagnosis Related Groups

Psychiatric DRGs are identified in terms of their relative profitability within each hospital of a 386 hospital cohort. It is then determined whether hospitals admitted more of the more profitable and fewer of the less profitable patients over the period 1983-1987 (skimming). Also determined is whether hospitals discharged more of the less profitable to other short term hospitals over that same period of time (dumping). The findings generally indicate that this did not happen.