Diagnosis-Related Groups (DRGs)

Diagnosis-Related Groups (DRGs) are a classification system used by hospitals and health insurers to group patients with similar medical conditions and treatment needs. When a patient is admitted, their diagnosis and procedures are categorized into a specific DRG, which determines the fixed payment the hospital will receive for their care. This system encourages efficiency by providing a set budget for each case, regardless of actual costs, and helps streamline healthcare billing and resource management. DRGs aim to promote quality care while controlling healthcare expenses.