Burn DRGs: effects of recent changes and implications for the future.

With the institution of Diagnosis Related Groups (DRGs), the economic survival of tertiary care centers may be threatened. Even more worrisome to these institutions is the possibility of other third-party payors following Medicare's lead and converting to this reimbursement plan. This paper examines the present financial status of the Burn Center at the University of New Mexico Hospital, as well as the future impact if all third-party payments were based on the DRG system. For fiscal years 1985-1987, the Burn Center lost $246,512 over cost for Medicare patients. There was a profit of $724,762 for other third-party payors, and a loss of $692,354 for indigent patients. This resulted in a total loss of $214,101 for the Burn Center during the 3-year study period. With the hypothetical conversion++ of all third-party reimbursement to DRGs, the total 3-year loss would become $1,253,393. The effect of DRG 472, a recent change in burn DRG classification, is discussed, as well as specific recommendations to rectify current problems.