Background: Thai Diagnosis Related Group [TDRG] version 5 has been widely used in Thailand as a coding and information
system for managing hospital reimbursement.

Objective: The present study aimed to examine how well TDRG reflects actual inpatient costs of primary total knee arthroplasty [TKA] at Naresuan University Hospital.

Materials and Methods: Records of patients admitted from October 2014 through September 2015 were obtained from the hospital's financial department. A total of 394 TKA patients were identified, including 224 patients covered under the Civil Servant Medical Benefit Scheme [CSMBS] and 170 covered under the Universal Health Coverage Scheme [UHC].

Results: (1) The adjusted relative weights [AdjRWs] of UHC and CSMBS beneficiaries were not statistically significantly different, although CSMBS patients had a longer average length of hospital stay [LOS]. (2) Despite the fact that bilateral TKAs doubled the health care cost compared to unilateral TKA, the AdjRW was approximately double that for unilateral TKA, reflecting a fair and reasonable hospital reimbursement. (3) Although the difference was not statistically significant, we found that the variation in the cost of care for primary TKA depended on the severity of the patient's co-morbidity, e.g., greater need for treatment, higher AdjRW, and longer LOS. Hospital reimbursement for patients with comorbidities was higher than hospital care costs for
patients none regardless of the severity level of the comorbidity. (4) The vendor managed inventory [VMI] system for knee prostheses did not affect the AdjRW and did not make a statistically significant difference in hospital profit or loss. (5) The AdjRW, LOS, and hospital net profits varied with the surgeon who performed the TKA.

Conclusion: TDRG version 5 is a reasonable system for reimbursement of patient' cost for primary TKA, and it seems to reimburse appropriately for comorbid TKA patients as well. Cost containment strategies that focus on shortening LOS and cost-saving related to treatment plans managed by individual surgeons could potentially enhance the hospital's net profit.

Keywords: Thai Diagnosis Related Group [TDRG], Reimbursement, Vendor Managed Inventory (VMI), Total
knee arthroplasty