TECHNICAL NOTES
Definitions
APR-DRG (All Patient Refined Diagnosis Related Group): One of almost 400 classifications of diagnoses in which patients demonstrate similar resource consumption and length-of-stay patterns. The APR-DRGs are designed to describe the complete cross section of patients seen in acute care hospitals. In 1993, the severity-adjusted APR-DRG system was jointly selected by the Indiana State Department of Health and the Indiana Hospital&Health Association as the system of choice for reporting of Indiana’s hospital discharge data.
Peer Group: In order to provide a more balanced comparison of hospital information, the hospitals in the state have been grouped into similar categories based on services provided and resources available. Hospital peer groups have been assigned based on several factors. The most important of these factors are: number of beds, number of discharges, types of major services offered such as ICU facilities, and number of surgeries performed. The assignment of peer groups allows a fairer comparison of hospital performance within the state; assignment was initially performed in 1994. Peer group #1 contains the smallest hospitals in the state while peer group #6 contains the largest hospitals offering the most sophisticated services and largest resources. Peer group #7 contains the specialized rehabilitation or transitional hospitals as a group. Peer group "p" contains the hospitals specializing in psychiatric, mental health or substance abuse treatment. Federal- and state-owned hospitals have separate peer groups -- "f" and "s" respectively. Four newer or specialized hospitals comprise peer group #8 – "Ungrouped". Also, for the purposes of this report, Community Hospital North was assigned to Peer Group #5 and Dunn Memorial to Peer Group #3.
Severity: Each consolidated APR-DRG is subdivided into four subclasses based on the complexity level of the secondary diagnosis and the interaction between it and other factors such as age, procedures, etc. The scale ranges from 1 to 4 with ‘1’ = ‘minor’, ‘2’ = ‘moderate’, ‘3’ = ‘major’ and ‘4’ = ‘extreme’. Patients with higher severity scores will usually require longer lengths of stay, consume greater resources and hence incur higher total charges. (See the figure below for an example.)
Average Length of Stay & Average Total Charges vs. Severity
Peer Group 5, APR-DRG 127
Average Severity - Hospitals: If a hospital were to admit mainly patients with very severe conditions, it would appear to have unusually high lengths of stay (LOS) and total charges when compared to its peers. Consequently, an "Average Severity" for each hospital within a given APR-DRG was calculated according to the following formula:
Average Severity = [(Number of discharges in severity category 1) x 1 + (Number of discharges in severity category 2) x 2 + (Number of discharges in severity category 3) x 3 + (Number of discharges in severity category 4) x 4] / Total number of discharges
For example:
St. Margaret Mercy Healthcare Center North - Hammond, APR-DRG 127
Number of Discharges |
Severity |
|
| 137 | 1 | |
| 333 | 2 | |
| 157 | 3 | |
| 34 | 4 | |
| Total = | 661 | |
Average Severity = (137 x 1) + (333 x 2) + (157 x 3) + (34 x 4) / 661 =
(137 + 666 + 471 + 136) / 661 = 1410 / 661 = 2.13
Average Severity - Peer Groups: Average
Severity was calculated for every peer group in each APR-DRG using a similar methodology.
Interpolation - Length of Stay (LOS): To provide a basis for the comparison of the LOS at each hospital with the LOS for its corresponding peer group, the hospital’s Average Severity (for a given APR-DRG) was calculated as above and the LOS compared to the peer group's value at that severity level. For example, if a hospital’s discharges had an average severity of 1.5, its LOS would be compared to the peer group's value halfway between the peer group's LOS for a severity of one ("1") and its LOS for a severity of two ("2"). Mis-coded (negative) LOSs were changed to "missing".
Interpolation - Total Charges: To provide a basis for the comparison of Total Charges at each hospital with the Total Charges for its corresponding peer group, the hospital’s Average Severity (for a given APR-DRG) was calculated as above and the Total Charges compared to the peer group's value at that severity level. For example, if a hospital’s discharges had an average severity of 1.5, its Total Charges would be compared to the peer group's value halfway between the peer group's Total Charges for a severity of one ("1") and the peer group's Total Charges for a severity of two ("2").
Calculation of Average Charges: Average charges were calculated ignoring any data where total charges were reported as $0.00. Mis-coded (negative) charges were changed to "missing". In addition, since Richard L. Roudebush VA Medical Center does not report charges for all APR-DRGs and procedures, all of its charges were set to missing.