Using DRGs and standard costs to control nursing labor costs.

Nursing care is a very significant part of a healthcare organization's costs. However, until recently, methods of controlling nursing costs were largely ineffective. With the implementation of the prospective payment system and the use of diagnosis related groups, budgeting and controlling nursing costs are now possible with the use of standard costing. In this article, methods and procedures are discussed and explained for controlling inpatient nursing costs with the use of DRGs and standard costs.