• We are sorry, but NCBI web applications do not support your browser and may not function properly. More information
Logo of hsresearchLink to Publisher's site
Health Serv Res. Dec 1992; 27(5): 587-606; discussion 607-12.
PMCID: PMC1069899

A study of the relationship between severity of illness and hospital cost in New Jersey hospitals.


In response to concerns over the equity of diagnosis-related group (DRG)-based prospective payment, the New Jersey Department of Health conducted a Severity of Illness evaluation study in which severity of illness, DRG, and uniform cost information were collected for 76,798 patients in 25 hospitals. Severity of illness was measured using the Computerized Severity Index (CSI) and was found to be a significant determinant of hospital cost in 76 DRGs that accounted for 41.4 percent of the total direct hospital patient care costs and 27 percent of the patients. The addition of CSI severity levels to the 76 DRGs reduced the coefficient of variation of cost in these DRGs by 17.4 percent and improved the overall reduction in variance of cost within the 76 DRGs by 38.2 percent. The change in total hospital payments due to the addition of severity for the 76 DRGs varied from a positive 5.71 percent to a negative 5.48 percent. These results demonstrate that a severity adjustment to this subset of DRGs would result in a more equitable DRG-based prospective payment system.

Full text

Full text is available as a scanned copy of the original print version. Get a printable copy (PDF file) of the complete article (1.8M), or click on a page image below to browse page by page. Links to PubMed are also available for Selected References.

Selected References

These references are in PubMed. This may not be the complete list of references from this article.
  • Ament RP, Dreachslin JL, Kobrinski EJ, Wood WR. Three case-type classifications: suitability for use in reimbursing hospitals. Med Care. 1982 May;20(5):460–467. [PubMed]
  • Calore KA, Iezzoni L. Disease staging and PMCs. Can they improve DRGs? Med Care. 1987 Aug;25(8):724–737. [PubMed]
  • Coulton CJ, McClish D, Doremus H, Powell S, Smookler S, Jackson DL. Implications of DRG payments for medical intensive care. Med Care. 1985 Aug;23(8):977–985. [PubMed]
  • Horn SD. Measuring severity of illness: comparisons across institutions. Am J Public Health. 1983 Jan;73(1):25–31. [PMC free article] [PubMed]
  • Horn SD, Buckle JM. Severity indices: potential uses in quality measurement. Top Health Rec Manage. 1989 Dec;10(2):45–55. [PubMed]
  • Horn SD, Horn RA, Sharkey PD. The Severity of Illness Index as a severity adjustment to diagnosis-related groups. Health Care Financ Rev. 1984;Suppl:33–45. [PubMed]
  • Horn SD, Horn RA, Sharkey PD, Chambers AF. Severity of illness within DRGs. Homogeneity study. Med Care. 1986 Mar;24(3):225–235. [PubMed]
  • Horn SD, Sharkey PD, Buckle JM, Backofen JE, Averill RF, Horn RA. The relationship between severity of illness and hospital length of stay and mortality. Med Care. 1991 Apr;29(4):305–317. [PubMed]
  • Iezzoni LI, Ash AS, Cobb JL, Moskowitz MA. Admission MedisGroups score and the cost of hospitalizations. Med Care. 1988 Nov;26(11):1068–1080. [PubMed]
  • Iezzoni LI, Ash AS, Coffman GA, Moskowitz MA. Admission and mid-stay MedisGroups scores as predictors of hospitalization charges. Med Care. 1991 Mar;29(3):210–220. [PubMed]
  • Iezzoni LI, Restuccia JD, Shwartz M, Schaumburg D, Coffman GA, Kreger BE, Butterly JR, Selker HP. The utility of severity of illness information in assessing the quality of hospital care. The role of the clinical trajectory. Med Care. 1992 May;30(5):428–444. [PubMed]
  • Jencks SF, Dobson A. Refining case-mix adjustment. The research evidence. N Engl J Med. 1987 Sep 10;317(11):679–686. [PubMed]

Articles from Health Services Research are provided here courtesy of Health Research & Educational Trust


Related citations in PubMed

See reviews...See all...

Cited by other articles in PMC

See all...


  • MedGen
    Related information in MedGen
  • PubMed
    PubMed citations for these articles

Recent Activity

Your browsing activity is empty.

Activity recording is turned off.

Turn recording back on

See more...