Question

Are DRGs and RVUs great for budgeting hospitals and practices?

Definition of DRG. : any of the payment categories that are used to classify patients and especially Medicare patients for the purpose of reimbursing hospitals for each case in a given category with a fixed fee regardless of the actual costs incurred. — called also diagnosis related group.

RVU-Relative Value Unit

Answer 1

Answer-

Diagnosis Related Groups (DRGs) and Relative Value units (RVUs) are two metrics which help in planning and budgeting for the hospitals on different cases and helps in comparison with other hospitals.  

Diagnosis Related Groups (DRGs)

Diagnosis Related Groups (DRGs) is uesd for patient classification system which can be used for numerous purposes and helps in planning and budgeting. DRGs are used as a measure of performance and helps in comparisons with other hospitals.

DRGs help in analyzing the resource intensity of hospital care that is utilized by the method of price per case reimbursement. Itt is used as a metric to measure case mix through which the inpatients utilization of resources during the stay at the hospital vary with the duration of the stay.  

DRGs help in evaluation of the payment that the hospital is going to receive under the reimbursement system.

Relative Value units (RVUs)

Relative Value units (RVUs) is the main metric that helps the DRG budget for respiratory care. RVUs helps in measuring the resource that is utilized as a part of budgeting and resouces that each product has utilized in a given period.

In a hospital every doctor utilizes the resources and RVUs measures the resources that are are being consumed by the doctors . It helps in gauging the time and effort given by every doctor. RVUs helps in costing and as a precise measure of the utilization of resources.  

RVUs helps in projeting expense on the basis of number of minutes per treatment and to compute the resourse utilization.