Profitable and Unprofitable DRGs: The Implications for Access

Abstract

Given a choice, hospitals would prefer to admit a patient with the potential to contribute to an accounting profit and prefer not to admit a patient with the potential to contribute to an accounting loss. It is suggested that if all hospitals found the same DRGs to be unprofitable, access to inpatient care would be denied those patient types. A set of 509 hospitals was stratified according to bedsize, Medicare load, type of control, teaching status and geographic location. The 10 most and 10 least profitable DRGs were identified for each hospital category and a Spearman's rank order correlation was used to determine the similarity or dissimilarity across hospital category. The results indicate that the more alike hospitals are in terms of bedsize, Medicare load and teaching status, the more alike are the DRGs that are determined to be unprofitable (or profitable). Conversely, the less alike they were on these characteristics, the less alike were the unprofitable (or profitable) DRGs. There were no differences evident when the hospitals were classified according to type of control or geographic location. These results are generally encouraging in terms of potential access but disturbing in terms of possible further financial threat to rural hospitals.