Implementing DRGs at Silas B. Hays Army Community Hospital: Enhancement of Utilization Review

Silas B. Hays U.S. Army Community Hospital, Fort Ord, California has the potential to lose over 900 thousand in the supply budget category starting in fiscal year 1991. This reduction will occur during the conversion from a workload measure based on admissions, births and beds occupied Medical Care Composite Unite, MCCU to a Diagnosis Related Group DRG based workload measurement system. Title 10, Chapter 55 of the U.S. Code, Section 1101 requires the Department of Defense to use DRGs as the primary criterion for allocation of medical resources. The purpose of this study is to analyze the compensation of Silas B. Hays Hospital under DRGs. The approach includes determining compensations functional relationship to a patients gender, age, category, admitting service, length of stay, number of diagnoses, number of procedures, and transfer status, through stepwise multiple linear regression analysis. The results of this study showed the majority of variance in case mix can be explained by length of stay. The three most significant clinic services were a Newborn nursery, b Obstetrics, and c Family Practice Obstetrics. Dramatic changes in reimbursement were found possible using peer group management techniques.