title: Diagnosis-related group-adjusted hospital costs are higher in older medical patients with lower functional status.
abstract: OBJECTIVE
  To determine whether hospital costs are higher in patients with lower functional status at admission, defined as dependence in one or more activities of daily living (ADLs), after adjustment for Medicare Diagnosis-Related Group (DRG) payments.
  
  
  METHODS
  Prospective study.
  
  
  METHODS
  General medical service at a teaching hospital.
  
  
  METHODS
  One thousand six hundred twelve patients aged 70 and older.
  
  
  METHODS
  The hospital cost of care for each patient was determined using a cost management information system, which allocates all hospital costs to individual patients.
  
  
  RESULTS
  Hospital costs were higher in patients dependent in ADLs on admission than in patients independent in ADLs on admission ($5,300 vs $4,060, P<.01). Mean hospital costs remained higher in ADL-dependent patients than in ADL-independent patients in an analysis that adjusted for DRG weight ($5,240 vs $4,140, P<.01), and in multivariate analyses adjusting for age, race, sex, Charlson comorbidity score, acute physiology and chronic health evaluation score, and admission from a nursing home as well as for DRG weight ($5,200 vs $4,220, P<.01). This difference represents a 23% (95% confidence interval=15-32%) higher cost to take care of older dependent patients.
  
  
  CONCLUSIONS
  Hospital cost is higher in patients with worse ADL function, even after adjusting for DRG payments. If this finding is true in other hospitals, DRG-based payments provide hospitals a financial incentive to avoid patients dependent in ADLs and disadvantage hospitals with more patients dependent in ADLs.
authors.affiliation: Veterans Affairs National Quality Scholars Fellowship Program Division of Geriatrics, San Francisco VA Medical Center and University of California San Francisco, San Francisco, California 94121, USA. kchuang@medicine.ucsf.edu
authors.forename: Kenneth H
authors.initials: KH
authors.lastname: Chuang
authors.forename: Kenneth E
authors.initials: KE
authors.lastname: Covinsky
authors.forename: Laura P
authors.initials: LP
authors.lastname: Sands
authors.forename: Richard H
authors.initials: RH
authors.lastname: Fortinsky
authors.forename: Robert M
authors.initials: RM
authors.lastname: Palmer
authors.forename: C Seth
authors.initials: CS
authors.lastname: Landefeld
mesh_terms: D018806:APACHE; D000203:Activities of Daily Living / Q000145:classification*; D000368:Aged; D000369:Aged, 80 and over; D016001:Confidence Intervals; D003953:Diagnosis-Related Groups / Q000191:economics* / Q000706:statistics & numerical data; D005260:Female; D006760:Hospitalization / Q000191:economics*; D006801:Humans; D008297:Male; D006278:Medicare / Q000191:economics*; D011446:Prospective Studies; D014481:United States