Economic outcome under Medicare prospective payment at a tertiary-care institution: the effects of demographic, clinical, and logistic factors on duration of hospital stay and part A charges for medical back problems (DRG 243).

We investigated the effects of prospectively identified factors on the duration of hospital stay and part A charges in 240 hospitalizations (of 230 patients) for the diagnosis-related group "medical back problems" (DRG 243) at a tertiary-care institution in 1985 to determine whether heterogeneity existed within this reimbursement category. We confirmed our initial postulates that nonosteoporotic fractures and neck problems, as well as hospitalizations primarily for myelography after outpatient neurologic evaluation, had considerably different economic outcomes and thus excluded these categories from further analysis. Statistical analysis (forward stepwise regression) of the remaining 132 patients who had "general medical back problems" showed that increasing age, associated osteoporosis, and therapeutic injections best explained variation in the natural logarithm of duration of stay (R2 = 0.16). Total number of diagnoses, spondylosis, associated osteoporosis, age, therapeutic injections, and performance of special procedures best explained the variation in the logarithm of part A charges (R2 = 0.29). The ability to identify factors within a specified category that affect the duration of hospitalization and part A charges jeopardizes the fairness of prospective payment, and we believe that DRG 243 should be adjusted for age, comorbidity, and readily identifiable clinical syndromes that have disparate economic consequences. Because of poorly substantiated efficacy and a significant association with longer hospital stays and higher part A charges, clinicians should review the use of therapeutic injections for medical back problems. Analysis of case-mix such as ours should be helpful in promoting efficient practice and ensuring the fairness of any reimbursement system.