This information is extracted from each patient s chart by hospital coders following discharge. There are 499 separate DRG s, each of which is assigned a weight reflecting its costliness relative to the average for all DRG s. Hospitals in large urban areas-cities with more than 1 million people receive slightly higher payment rates than hospitals in other urban and rural areas. DRG s are not used for reimbursement of clinicians services, and we are generally unaware of what DRG s patients are assigned. However, hospital statistics about expected length of stay and CMI, derived from the DRG s, are used to analyze performance, which is in part attributed to clinicians. These statistics therefore have special meaning for Hospitalists.
Hospitals have financial incentives to cut costs and improve performance.
Pressure on outpatient physicians to improve outpatient productivity. That is, shortening length of stay would actually lead to a decrease in hospitalist revenue. Capitated systems have the potential to more rationally reimburse Hospitalists. Under a capitated system, a group practice or physician is paid solely on the basis of patient panel size. The group has financial incentive to limit the number of inpatient days per thousand by decreasing the length of stay and admission rate.