Impact of Diagnosis-Related Groups' Prospective Payment on Utilization of Medical Intensive Care

We examined the financial impact of diagnosis-related groups (DRGs) payment for Medicare patients receiving medical intensive care and looked for any change in the type of patients admitted to the medical intensive care unit (MICU) after one year's experience with DRGs. During 1984, payment for 267 Medicare patients receiving medical intensive care at a large, multispecialty referral hospital was calculated to be $2.6 million below cost, representing an average loss per discharge of $9,794. For those who died (42 percent), the average payment per case was $11,418 below the average per discharge cost. In 1985, 241 Medicare patients treated in the MICU showed an average loss per discharge of $14,113, which rose to $20,271 for those who expired (39.4 percent). There was no significant difference in mortality between the two groups and in type of patients per DRG assignment (p = 0.56 and p = 0.88, respectively) by Chi-squared test. Despite the 1984 DRG experience, there was no change in admission practices or utilization of MICU beds during 1985. Appropriate management responses are needed from both the Federal government and the medical profession for better utilization of MICU resources.