All institutional reimbursement for inpatient care in the State of New Jersey is administered by the DRG methodology (Prospective Payment System). This system is essentially identical to federal Medicare. In 1983 our hospital was designated the Level I trauma center for southern New Jersey (population 2.6 million). Prehospital triage guidelines based on anatomic injury were implemented, and, as a result, an annual 30 percent increase in severe trauma cases (ISS ³ 16) was realized. In late 1984 significant financial shortfalls were noticed, especially in the higher ISS cases. A oneyear study (1985) of all patients admitted through the Trauma Center to an intensive care unit was completed (523 patients;​ mean ISS 15.16;​ ISS ³ 16 37.8 percent). All patients were stratified to one of five ISS groups (A:​ ISS 1-8, B:​ ISS 9-15, C:​ ISS 16-24, D:​ ISS 25-40, E:​ ISS > 40). Average Cost, Reimbursement, ISS, LOS, and Mortality were reviewed for the entire aggregate and each severity group.

The system of ISS grouping was an accurate method of cost analysis, and prospectively, ISS grouping allowed prediction of length of stay and total hospital cost. In addition, these data allowed early fiscal management decisions and resource allocation.

As a reimbursement system, DRG falls short of the cost of care for all ISS levels and groups. As severity of injury rose, costs increased in a linear manner, but reimbursement did not, resulting in a substantial financial loss. The net loss to the hospital in one year was $1.86 million. Based on this experience, DRG's are not capable of supporting trauma care and if adopted by other state agencies or third party payors would end the concept of the trauma center.