Objectives: Diagnosis Related Group (DRG) systems aim to classify patients into mutually exclusive groups of patients, with the patients in each group having the same expected length of stay (LOS). We examined the ability of current classification variables to explain LOS variation between DRG-like Diagnosis Treatment Combination (DBC)s for ten episodes of care in the Netherlands, including breast cancer, stroke and inguinal hernia repair. Additionally, we assessed the predictive ability of some other classification variables. Methods: For each episode of care, the relevant DBC codes of all hospitalizations in 2008 were identified and all available determinants that may serve as classification variables were acquired from the national database. Ordinary least squares regression was used to examine the predictive ability of these classification variables. Results: The current classification variables are not sufficiently distinct to classify patients into mutually exclusive groups of patients. ICU admissions and hospital type may serve as valuable classification variables. Additionally, episode-specific variables may improve the Dutch grouping algorithm. Conclusions: Although it may not be feasible in the short term, grouping algorithms would benefit greatly from the introduction of classification variables tailored to the needs of specific episodes of care. A first step would be to focus on 'general' classification variables meaningful for specific episodes of care.

Additional Metadata
Keywords Classification variable, Diagnosis related group, Episode of care, Grouping algorithm, Hospital efficiency
JEL Economic Methodology (jel B41), Model Construction and Estimation (jel C51), Allocative Efficiency; Cost Benefit Analysis (jel D61), Structure, Scope, and Performance of Government (jel H11), Comparative Analysis of Economic Systems (jel P51)
Persistent URL dx.doi.org/10.1007/s10198-012-0436-1, hdl.handle.net/1765/38179
Journal The European Journal of Health Economics
Grant This work was funded by the European Commission 7th Framework Programme; grant id fp7/223300 - EuroDRG – Diagnosis-Related Groups in Europe: towards Efficiency and Quality (EURODRG)
Tan, S.S, van Hakkaart-van Roijen, L, van Ineveld, B.M, & Redekop, W.K. (2013). Explaining length of stay variation of episodes of care in the Netherlands. The European Journal of Health Economics, 14(6), 919–927. doi:10.1007/s10198-012-0436-1