PEDIATRICS Vol. 84 No. 1 July 1989, pp. 49-61
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Revising Diagnosis-Related Groups for Neonates

Leo K. Lichtig PhD1, Robert A Knauf MPH1, Albert Bartoletti MD1, Lynn-Marie Wozniak MS, ART1, Robert H. Gregg MD1, John Muldoon MHA1, and William C. Ellis MD1

1 The Health Care Research Foundation, Inc, Empire Blue Cross and Blue Shield, Albany, New York

Groups of neonates who are usually treated at hospitals that provide specialized pediatric care are not adequately classified by the use of diagnosis-related groups (DRGs). Therefore, a set of revised DRGs, pediatric modified DRGs (PM-DRGs), have been developed. Use of PM-DRGs substantially improves the classification of neonates in the following ways: a single pediatric modified major diagnostic category has been defined to include only and all neonates (patients younger than 29 days of age when admitted to the hospital); deaths and transfers of newborns are no longer combined into a single group; birth weight (rather than diagnosis) is used as the primary variable to differentiate categories of neonates; and duration of mechanical ventilation, presence of major problems, and surgery are used to define specific PM-DRGs. A total of 46 PM-DRGs have been developed to replace the 7 DRGs for neonates. Based on a sample of discharged patients from 13 children's hospitals, the overall variance reduction in duration of stay for neonates using PM-DRGs was 38.7% compared with 20.4% for DRGs. Variance reduction for PM-DRGs was 45.9% compared with 16.3% for DRGs when operating cost per case was used instead of duration of stay. After removing outliers at 150 days, the duration of stay variance reduction was 53.3% vs 23.6%, respectively, and the operating cost variance reduction was 58.8% vs 17.8%, respectively.

Key Words: pediatric case mix • pediatric modified diagnosis-related groups • birth weight • children`s hospital • neonatal intensive care • prospective payment systems

Submitted on July 16, 1988
Accepted on August 30, 1988




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