Potential for inpatient-outpatient substitution with diagnosis-related groups

Through analysis of data from the universal health insurance system in Manitoba, Canada, surgical diagnosis-related groups (DRG's) with the greatest potential for inpatient-outpatient substitution are identified. Candidates for both “inpatient shift” and “outpatient shift” are discussed. It is also suggested that determination of the procedure chiefly responsible for hospital admission complements approaches to improve the DRG classification system by measuring severity of illness. Thus, health care planners' efforts may be facilitated in establishing effective payment systems, though definitive guidelines are not provided.