Analyzing pharmacy charges using DRGs

Abstract

Pharmacy charges at a 316-bed community hospital were analyzed using diagnosis-related groups (DRGs). All patients admitted to the hospital between January 1, 1983, and August 31, 1983, were retrospectively categorized by DRG. For the 20 most expensive DRGs for the pharmacy department in terms of pharmacy charges, the following data were compiled: number of patients, total pharmacy charges, mean hospital and pharmacy charges per patient, mean length of stay, pharmacy charges as a percentage of hospital charges, and DRG distribution and total pharmacy charges by major diagnostic category ( MDC ). A total of 10,550 patients were assigned to 390 DRGs. For the 20 most expensive DRGs, the mean total pharmacy charges and number of patients per DRG were $83,457 and 140, respectively. DRG 107 (coronary bypass) and MDC 5 (diseases and disorders of the circulatory system) had the highest pharmacy charges in the respective DRG and MDC categories. Pharmacy charges as a percentage of hospital charges ranged from 4.1% to 32% for the 20 most expensive DRGs. While there appeared to be a direct relationship between high hospital charges and length of stay for the most expensive DRGs, there did not appear to be a direct relationship between these two measures and high pharmacy charges. Until hospitals have data on actual cost per case and on cost per DRG for each department, analysis of pharmacy charge data by DRG for establishing pharmacy priorities may be a reasonable approach.