Drg Analysis

Productivity measurement is an ongoing challenge for any business, health care is not excluded. Management often looks to productivity to improve financial results of the organization. Productivity is not just about measuring outputs or inputs. Cost accounting pays a significant role in productivity management as managers are tasked with gathering data which will be considered in the decision making and performance management review process.

The total productivity (total outputs/total inputs) and partial productivity ratios (total outputs/partial inputs) are not easily defined as there is no absolute standard or tolerance that is deemed to be acceptable. There is a significant amount of variance between health care providers which make it difficult to benchmark one organization over another. In most cases, it is best to compare internal results over time within the organization in order to make the most out of the data used.

The services offered by health providers are often difficult to measure as they vary considerably. (unlike a car manufacturer that produces the same product over and over). There is a significant amount of human logic (diagnoses and hypothesis) that must are considered which can impact the input or labor hours spent on a patient.

Revenues and expenses in the health care setting can be volatile and produce incomplete measurements. As well, labor is a large component in productivity management. There are a number of support services that must be factored into the total treatment. Challenges may exist in documenting the direct and indirect time spent for each therapy.

I located one study that addressed the challenges in measuring productivity. Ruchlin confirmed the “concern for hospital performance has in turn led to an increased awareness of the limitations of traditional measure such as number of admissions or discharges, patient days of care, cost per patient per day, staff/patient ratio, or percent...