About Casemix

About Casemix

Casemix classifications provide the health care industry with a consistent method of classifying types of patients, their treatment and associated costs. In popular usage, casemix refers to the mix of types of patients treated by a hospital or other health care facility (Eagar and Hindle 1994).

Casemix classifications are useful because they help to explain the relationship between health care activity and costs. They make use of data about patients that are clinically meaningful and that explain variation in resource use.

The AR-DRG Classification System is used to classify acute admitted patients, with other casemix classifications being used to classify other patient care. All patients who are admitted to hospital have their disease/s and any procedure/s undertaken during the admission coded using ICD-10-AM/ACHI/ACS. This coding is undertaken by specialist clinical coding staff. This coded information along with some patient demographic data (such as age, sex, patient’s length of stay) are used to allocate acute patient admissions to an AR-DRG  class. DRG assignment is either performed by the clinical coder (if they are using coding and grouping software), or by the hospital and/or relevant state health authority.

Allocation of patient hospital episode using ICD-10-AM/ACHI, then AR-DRG


A hospital’s AR-DRG profile reflects the mix of acute care patients treated by the hospital. Cost weights are developed for each AR-DRG class that can be used for funding purposes in an Activity Based Funding or casemix funding model.

Apart from activity based funding, casemix information is used in a number of data collections by organisations such as state health departments, the Australian Institute of Health and Welfare and the Australian Government Department of Health.

Last reviewed: 13 October, 2016

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