The Chief Medical Officer of a Large Mid-West provider wanted to improve Diagnostic-Related Group (DRG) performance across multiple hospitals.  Focus was on high-cost / high-volume diagnoses with cost reduction opportunities.  Opportunities were defined as diagnoses where physicians yielded average costs more than two standard deviations from the mean.  Goals were to reduce Length of Stay and reduce service utilization within DRG‘s.

Five DRGs were identified and the hospital representing the best practice and performance had 90 days to innovate and improve their particular DRG.  All hospitals in the system were represented with at least one best practice DRG.  Each hospital was then given another 30 days to leverage the learning from a lead hospital’s best practice DRG and incorporate it into their own corresponding DRG. 

The initial five DRGs were:  Normal newborn, Pneumonia, Joint replacement revisions, Stroke, and Heart failure. The first round focused on Pneumonia.  Each hospital had a single 30 day iteration to adopt 43 areas of functionality.  Physicians and representative from all hospitals formed a Practice focus on the 5 DRG’s.  This community of practice around DRG’s proceeded to learn how to reconfigure their hospital-based efforts to leverage improvements for each hospital.  Adaptive design methods and tools were used.  

Clinical performance in the Pneumonia DRG improved 8 - 12% at each hospital within 30 days.  A similar approach was followed for the 4 other DRG’s.  The other DRGs all demonstrated clinical improvement resulting in a system performance lift across the 5 metro hospitals.