An HMO medical program began reimbursing hospitals according to diagnostic-related groups (DRGs). Each DRG has a specified standard “length of stay.” If a patient leaves the hospital early, the hospital is financially impacted favorably, but a patient staying longer than the specified time costs the hospital money.
a. From the hospital administrator’s point of view, would you want favorable length-of-stay variances? How might you try to obtain such variances?
b. From a patient’s point of view, would you want favorable length-of-stay variances? Answer this question from the point of view of (1) a patient who has had minor surgery and (2) a patient who has had major surgery.
c. Would favorable length-of-stay variances necessarily equate to high-quality care?