Table 3.

Explanation of Variance Statistics (R2) for Costs and Lengths of Stay for Three DRG Classification Systems

PatientsMedicare DRGs (V 12.0)AP-DRGs (V 12.0)APR-DRGs (V 12.0)
Neonates (costs)
 Untrimmed data0.2920.5070.627
 Trimmed data0.3570.5730.655
All age patients (costs)
 Untrimmed data0.4080.4690.531
 Trimmed data0.5150.5600.601
All age patient (LOS)
 Untrimmed data0.3130.3690.421
 Trimmed data0.3800.4360.479
  • Costs include hospital operating and capital costs, exclusive of graduate medical education costs, adjusted by HCFA area wage index.

    Trimmed data set excludes extreme outliers. High-cost outliers are defined as the highest 1% of patients and low-cost outliers as the lowest ½% of patients in each DRG in each DRG system.

    The N for neonates = 492 558. The N for all age patients = 4 203 646.

    See Appendix 4 for technical explanation of explanation of variance (R2) statistics.