The history of Diagnosis Related Groups (DRG's), a system for classifying patients in acute care hospitals, developed by researchers at Yale University, USA, is reviewed. DRGs are an instrument for measuring the hospital product, primarily from a management viewpoint. Starting with a review of the definitions of hospital product, the article follows the course from the first DRGs through the most recent revision, providing a summary of potential and current applications of the system in several countries, which range from payment mechanism to uses in quality control.
Diagnostic related groups; Hospital administration