The Financial Impact Of Medicare Diagnosis-Related Groups: Effect Upon Hospitals Receiving Cardiac Patients Referred For Tertiary Care Article Review Example

Article Review

This article is about a study that was carried out to assess the fiscal effects of DRGs (Diagnosis-related groups). The study was conducted by comparing 183 non-Medicare and 128 Medicare cardiac patients. The non-Medicare patients consisted of those who were evacuated aero-medically to a referral healthcare facility for critical care. The article covers how a Medicare DRG system can be adopted by different parties and the corresponding financial effects. Furthermore, the article analyzes how some critical care patients are disadvantaged by the different DRG systems adopted by different healthcare facilities. In general, the article analyzes the financial impact of Medicare DRG system by analyzing effects on hospitals that specifically receive cardiac patients who have been referred for critical care (Thomas, et al., 1987).
The article points out that there is a significant difference between Medicare and non-Medicare patients. The article notes that Medicare patients have a mortality rate of 13% while non-Medicare patients have a mortality rate of 6% according to the research findings (Thomas, et al., 1987). The study establishes that there is no difference between the two patient groups in terms of ICU (Intensive Care Unit) admissions. Furthermore, the article establishes that the average amount of time spent in ICU by both patient groups is the same, including the average length of hospitalization. Remarkably, this article also establishes that the mean number of surgical operations and the average number of ICD (International Classification Diagnoses) procedures for both Medicare and non-Medicare patients is similar. The article distinctively states that the average cost of Medicare patients’ care is slightly higher compared to that of non-Medicare patients. Specifically, the mean cost of care for Medicare patients is $13427 ± $12700 for each patient. On the other hand, the average cost of care for non-Medicare patient is $10474 ± $10114 (Thomas, et al., 1987).
The study finds out that the cost is different in figures but statistically the same. The article notes that; under the Medicare DRG (Diagnosis-Related Group), prior cost based care payments have been abridged considerably. Under the DRG system, patients pay 24% less of the payments made normally (Thomas, et al., 1987). According to this article, DRG care payments are comparatively low and that they provide merely 60% of the total costs needed by Medicare cardiac patients (who have been referred for critical tertiary care) (Thomas, et al., 1987). The study establishes that; if the third party payers adopt the DRG system, hospital revenues will be reduced significantly by 10%. Thus, the system would be able to cater for only 68% of the total costs required by referred cardiac patients for critical care (Thomas, et al., 1987). In essence, the article analyzes the various ways on how costs are affected when DRG systems are adopted. Despite the fact that a significant reduction in costs might be positive, the article notes that, some hospitals may be financially disadvantaged.
Notably, the article is about cardiac patients who are referred for tertiary care as the interest group. The information provided in the article also directly applies to critical care facilities. The study findings indicate that; under the Medicare DRG system, healthcare facilities that receive big numbers of cardiac patients who are seriously ill are greatly disadvantaged financially (Thomas, et al., 1987). Furthermore, the article, under the implications for practice and future study, notes that; economic pressures in future might hinder critical care treatment facilities from receiving the big numbers of cardiac patients in case of referrals (Thomas, et al, 1987). This implies that patients reimbursed under the Medicare Diagnosis-Related group will no longer be accepted in the future by critical facilities due to the financial pressure it puts on the facilities.

Critical Thinking Questions

1. What possible interventions can be used to reduce the financial impact of Medicare DRG System?
2. Are there significant alternatives for the Medicare DRG system?

References

Thomas, F. et al., (1987). The Financial Impact of Medicare Diagnosis-Related Groups: Effect upon Hospitals Receiving Cardiac Patients Referred for Tertiary Care. Chest Journal, Vol. 91(3): pp 418-423.