Objectives: Calculations of healthcare costs rarely disclose the
specific approach used to allocate the cost of hospitalizations by diagnosis.
However, the type of approach used can have a major impact on the findings in
the case of significant comorbidities. The present analyses compared three
approaches for attributing Medicare DRG reimbursements (which were used as
surrogates for average costs) for hospitalization by diagnosis.
Methods: Medical resource utilization data from the National
Hospital Discharge Survey were analyzed using each of three allocation
approaches: a) attributing 100% of the cost of hospitalization to the disease
when it was the first-listed diagnosis; b) attributing a portion of the cost
of hospitalization to the disease, depending on its position in the list of
diagnoses and the relevance of any comorbidities; and c) an incremental
analysis of cost based upon the hospitalization experiences of an age and
gender matched cohort. These three approaches were applied to the cost of
hospitalization for chronic obstructive pulmonary disease (COPD).
Results: The first approach projected 206,098 hospitalizations at
$3,449 per hospitalization for a projected U.S. annual total of $711 million.
The second approach projected 681,547 hospitalizations at $3,205 per
hospitalization for a projected U.S. annual total of $2.2 billion. The third
approach also projected 681,547 hospitalizations, but at $2,361 per
hospitalization, for a projected U.S. annual total of $1.6 billion.
Conclusions: Expanding from the example on COPD, the limitations
of each approach are described and their applications to other conditions are