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Diagnosis Related Groups (DRG)

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THE PROBLEM Diagnosis Related Groups (DRG) is a procedure implemented by the United States government for the reimbursement of hospitals and other health care providers, in those instances where the government is liable for the costs of health care. The DRG procedures provides reimbursement on a prospective basisprospective payment system (PPS), which means that the amount of the reimbursement for health care services is established before the services are delivered. The various costbased reimbursement procedures replaced by the DRG procedure were retrospective in characterretrospective payment system (RPS), which means that the amount of reimbursement was determined subsequent to the delivery of health care services, and was based directly upon the provider costs incurred in the delivery of such services.

The United States government is liable for the cost of health care services delivered generally with respect to the elderly, under the Medicare Program, and with respect to the indigent, under the Medicaid Program. Critics of the DRG procedure claim that its use will produce some adverse effects. Among the more significant of the adverse effects are (1) a restriction in the access to health care services for those individuals whose health care is funded by the United States government, (2) a dimunition in the quality of the health care services received by many of the individuals for whom the federal government

. . .
le the proponents of the DRG procedure claim that the primary goal of its use is to improve the quality of health care services, while, at the same time, controlling costs, many health care analysts contend that cost containment is the sole aim of the implementation of the DRG procedure (Zaremski and Rehm, 1985). Some research findings investigating the application of the DRG procedure have confirmed the existence of a strong statistical relationship between case mix and cost, with an efficient DRG case mix leading to a lowering of total health care costs in the shortrun (Schelnker, 1986). Research has also confirmed the existence of a positive relationship between the cost and quality of health care services delivered, with the quality of health care services rising as the cost of the services rise, and the quality of health care services declining, as the cost of the services decrease (Schlenker and Shaughessy, 1984). Thus, the implication of both sets of research findings is that, while the application of the DRG procedure may lead to overall cost reductions in the shortrun, a simultaneous deterioration in the quality of health care services delivered will also occur. Another problem of potential significance in t
. . .

Some common words found in the essay are:
HYPOTHESIS Tentatively, Medicare Medicaid, Critics DRG, Related DRG, According Meyer, Zaremski Rehm, PPOs Currin, health care, Schlenker Shaughessy, REVIEW DRG, drg procedure, health care services, care services, Margolis Wise, united government, quality health care, quality health, individuals united government, responsible health, government responsible health, individuals united, united government responsible, government responsible, care funding, services delivered,
Approximate Word count = 1690
Approximate Pages = 7 (250 words per page)

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