Case Mix, Costs, and Outcomes: Differences Between Faculty and Community Services in a University Hospital

In order to gain insight into the possible consequences of prospective payment for university hospitals, we studied 2,025 admissions to the faculty and community services of a university hospital, measuring differences in case mix, costs, and outcomes. The faculty service case mix was disproportionately weighted toward the more costly diagnoses, but even after adjustment for diagnosis-related groups (DRGs), costs were 11 percent higher on the faculty service. The differential was proportionately greater for diagnostic costs than for routine or treatment costs, and the differential was particularly large (70 percent) for patients with a predicted probability of death (DTHRISK) of .25 or greater.The in-hospital mortality rate was appreciably lower on the faculty service after adjustment for case mix and patient characteristics. The mortality differential between the two services was particularly large for patients in the high death risk category. Comparison of a matched sample of 51 pairs of admissions from the high death risk category confirmed the above results with respect to costs and in-hospital mortality, but follow-up revealed that the mortality rates were equal for the two services at nine months after discharge.