The Costs of Disease

Abstract

To date there have been no studies identifying and comparing the component costs to treat a large number of diseases for hospitalized inpatients. Hospital costs were analyzed for 486 diagnosis-related groups (DRGs) relating to >1.3 million patient discharges from 60 University Hospital members of the University HealthSystems Consortium. For each DRG, length of stay, total cost, and key cost components were analyzed, including accommodation, intensive care, and surgery. In general, total costs of diseases classified as surgical exceeded those classified as medical. Diseases involving organ transplantation typically cost more than other diseases. However, within the studied population, the two DRGs accounting for most total healthcare dollars were percutaneous cardiovascular procedures and management of neonates with immaturity or respiratory failure. Considering six key cost components, as well as disease complexity and length of stay, the best predictors of total costs for medical conditions were the length of stay and accommodation (housing, meals, nursing services) costs, whereas for surgical conditions, the best predictor of total costs was laboratory costs. This analysis may be used within an individual institution to identify surgical or medical diagnoses with total or component costs at variance with the group mean. A hospital may focus its cost reduction efforts to make decisions to expand, alter, or eliminate particular clinical programs based on comparison of its own total and component costs with those from other hospitals in the database.