Comparing outcomes of care before and after implementation of the DRG-based prospective payment system

We compared patient outcomes before and after the introduction of the diagnosis related groups (DRG)-based prospective payment system (PPS) in a nationally representative sample of 14 012 Medicare patients hospitalized in 1981 through 1982 and 1985 through 1986 with one of five diseases. For the five diseases combined, length of stay dropped 24% and in-hospital mortality declined from 16.1% to 12.6% after the PPS was introduced (PPPPPJAMA. 1990;264:1984-1988)