This Note documents the relationship between the principal and secondary diagnoses of Medicare hospital patients and the propensity of these patients to use home health agencies, skilled nursing facilities, and rehabilitation facilities after discharge from the hospital. The study demonstrates that knowledge of a patient's secondary diagnoses provides additional information about the patient's use of posthospital care beyond that contained in the principal diagnosis. It provides concrete evidence that knowledgeable administrators can skim desirable patients, not only from the current hospital diagnosis-related group (DRG) categories, but also from categories defined by the principal diagnoses contained in the current DRG categories.
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