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June 25, 1982

Diagnostic-Related Groups

JAMA. 1982;247(24):3314-3315. doi:10.1001/jama.1982.03320490018022

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To the Editor.—  The discussion of "Medical Practice, Case Mix, and Cost Containment" by Young and Saltman (1982;247:801) that focuses on a criticism of hospital reimbursement systems based on diagnosis-related groups (DRGs) appears to have been prepared without any detailed knowledge of the one DRG reimbursement system actually in place in New Jersey. Many of the comments in that article thus address problems that do not exist, or no longer exist, while the authors' proposed "alternative" actually resembles much of what is already in place in New Jersey.Specifically, DRG reimbursement in New Jersey now directly addresses the difference between fixed and variable costs, distinguishes among differing secondary diagnoses, and employs substantially less heterogeneous measures of case-mix, validated on a statewide population. Length of stay turns out to be as good a surrogate as any for resource consumption within major diagnostic categories, and no one really believes the notion that