Apr-Drgs: a Severity Adjustment Methodology

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Running head: APR-DRGs: A SEVERITY ADJUSTMENT METHODOLOGY

APR-DRGs:
A Severity Adjustment Methodology
Quality Management In Healthcare

Abstract
All Patient Refined Diagnostic Related Groups (APR-DRGs) currently represent one of the most widely used systems for severity adjustment of hospital outcome comparisons. Severity Adjustment is the method used to account for differences in patient characteristics such as age, severity of illness, and risk of mortality independent of the actual medical treatment given. As a result, it’s possible to make better comparisons of hospital data and allow facilities to substantiate the notion that “my patients are sicker.” Data sources for severity adjustment currently can be clinical (e.g., a medical record) or administrative (e.g., discharge abstracts). APR-DRGs are a refinement of Medicare’s DRG system and incorporate severity of illness and risk of mortality measures. Studies show APR-DRGs perform about as well, and in some cases better, than competing severity adjustment systems based on administrative data. Overall, their widespread usage can be explained by their low cost, flexibility, and methodology.

APR-DRGs: A Severity Adjustment Methodology
Introduction
All Patient Refined Diagnostic Related Groups (APR-DRGs) are a patient classification system developed by 3M Health Information Systems. They are a refinement of Medicare’s current DRG system to include severity of illness and risk of mortality measures. In APR-DRGs, severity of illness is defined as the extent of organ system loss of function or physiologic decompensation, while risk of mortality is the likelihood of dying (Averill, 2002).According to the Centers for Medicare and Medicaid Services (CMS), APR-DRGs are one of the most widely used severity adjustment methodologies for comparative hospital performance (Medicare Program, 2006). Therefore, the purpose of this paper is to define what severity adjustment is, why it’s important, and the data sources available. An in-depth history and breakdown of APR-DRGs, who is using them, and an assessment of their use as a severity adjustment methodology will follow this. What is Severity Adjustment?

Severity adjustment is a method used to account for differences in patient characteristics (e.g., age, income, and type of illness needing treatment) likely to affect the outcome of care (e.g., death, physical functioning, resource utilization, and cost), independent of the actual medical treatment given. The purpose of severity adjustment (sometimes referred to as severity-of-illness adjustment) is to allow for a fair comparison of health outcomes, such as death or disability level (Iezzoni, 1997). Comparing health outcomes such as mortality and morbidity is one way to evaluate the quality of care.

Although, for example, we might like to compare mortality rates or functional status after a particular type of surgery, it is important to recognize that patients who die or recover more slowly after an operation may not have received poorer quality care but may have been sicker before treatment. Patient characteristics such as age, severity of illness (e.g., localized cancer vs. metastatic cancer), and co-morbidities or secondary conditions (e.g., the patient with cancer is also diabetic) place patients at different risks for outcomes before receiving care (Iezzoni et al., 1996). Severity adjustment is used to refer to adjustments made both to reflect the severity of the disease that is the focus of treatment and the overall illness level of the patient, including co-morbid conditions. Because both types of severity can contribute to the likelihood of achieving good outcomes, both are included in severity adjustment models. By accounting for these types of baseline patient characteristics or risk factors, severity adjustment enables comparisons of health outcomes to be made (Iezzoni, 1997). Why is Severity Adjustment Important?

In the absence of severity...
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