A diagnosis-related group (DRG) is a patient classification system that standardizes future hospital payment and stimulates cost-cutting measures. A DRG payment, in general, covers all expenditures related with an inpatient stay from the time of admission until the time of release. These include expenses such as room and board, medical services, supplies, laboratory tests, radiology studies, anesthesia, pharmaceuticals, and other health care items. Each year, hospitals group together patients who have similar costs for treatment. They then report these combined costs to Medicare or their insurance company. The government and companies then pay based on these reported costs. Patients can only be classified into one DRG category; therefore, if a patient has multiple conditions, they will likely be placed in several different DRGs. This allows hospitals to get more consistent compensation regardless of how many cases they have during a given period. Hospitals use various methods to determine which patients should be grouped together under one DRG. For example, they may look at the primary diagnosis of the person coming to the hospital or the procedure used to treat them. They may also consider age, gender, and other factors when grouping patients. Patients do not experience charges being reported under this system. Instead, they experience reductions in their liability by comparing their total expected costs with what was actually spent during their stay.