The costs of disease

Background: To date there have been no studies identifying and comparing th e component costs to treat a large number of diseases for hospitalized inpa tients. Methods: Hospital costs were analyzed for 486 diagnosis-related groups (DRG s) 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 accommo dation, intensive care, and surgery. Results: In general, total costs of diseases classified as surgical exceede d those classified as medical. Diseases involving organ transplantation typ ically cost more than other diseases. However, within the studied populatio n, the two DRGs accounting for most total healthcare dollars were percutane ous cardiovascular procedures and management of neonates with immaturity or respiratory failure. Conclusions: Considering six key cost components, as well as disease comple xity and length of stay, the best predictors of total costs for medical con ditions were the length of stay and accommodation (housing, meals, nursing services) costs, whereas for surgical conditions, the best predictor of tot al costs was laboratory costs. This analysis may be used within an individu al institution to identify surgical or medical diagnoses with total or comp onent costs at variance with the group mean. A hospital may focus its cost reduction efforts to make decisions to expand, alter, or eliminate particul ar clinical programs based on comparison of its own total and component cos ts with those from other hospitals in the database. (C) 2000 American Assoc iation for Clinical Chemistry.