Studies on the variations of hospital use and the changes in hospital revenues of 10 KDRGs under the PPS

Abstract

In order to suggest the strategies for participation in the PPS(Prospective Patient System), analyses were performed based on variations in utilization pattern and changes in revenues of hospitals in 10 selected KDRGs. The data was collected from the claims data of a tertiary hospital in Kyunggido from September 1, 1995 to August 31, 1996.

The studies consisted of 1,718 inpatients diagnosed for lens procedures, tonsillectomy &/or adenoidectomy, appendectomy with complicated principal diagnosis, Cesarean section, or vaginal delivery without any complications.

The resources used in each KDRG were measured including average length of stay, total charges, number of orders, intensity of medical services, frequencies of medical services, the rate of non-reimbursable charges, and the rate of non-reimbursable orders. Then, the changes in hospital revenues due to the composition of medical fee schedules under the PPS were estimated as follows :

1) The variations in average length of stay, total charges, number of orders, the intensity of medical services, the frequency of medical services, the rate of non-reimbursable charges, and the rate of non-reimbursable orders among the 10 KDRGs were comparatively small.

2) The average length of stay was the longest(6.9 days) for appendectomy with complicated principal diagnosis, while it was the shortest(2.1 days) for two vaginal deliveries. Statistically differences existed in the average length of stay among physicians and among the dates of admission in several KDRGs.

3) The total charges were the highest for lens procedures(1,716,000 won), While the lowest charges were for two vaginal deliveries(558,000 won). Statistically differences in the total charges were found among physicians in several KDRGs : however, there were no differences with the dates of admission.

4) The number of orders was the greatest(155) for appendectomy with complicated principal diagnosis, while it was the smallest(75) for the two vaginal deliveries. Statistical differences in the number of orders did not exist among physicians in the KDRGs.

5) Significant differences were found in the intensity of medical services, and in the frequency of medical services among physicians in the KDRGs.

6) The rate of non-reimbursable charges for each KDRG was not related to the rate of non-reimbursable orders. The rate of non-reimbursable orders was the highest(36.0%) for lens procedures, while the lowest rate(11.0%) was for appendectomy with complicated principal diagnosis. The rate of non-reimbursable charges was the highest (39.4-39.7%) for vaginal deliveries, while the lowest rate(13.1%) was for tonsillectomy, &/or adenoidectomy(<17 ages).

7) If the physician´s practicing style were not change under the PPS, the hospital revenues could be increased by 10%, and the portion of patient payment could be decreased by 1.4∼22.4%. However, the non-reimbursable charges for showed little charge between two reimbursement systems.

Based upon the above findings, this hospital could be eligible for participation in the PPS(Prospective Payment System). However, the process of diagnosis and treatment should be standardized, identifying methods to reduce cost and to assure quality of medical care. Furthermore, consideration should be given to finding ways to increase patient volume.