Performance of the ACG case-mix system in two Canadian provinces

BACKGROUND. While the adjusted clinical group (ACG) system has been extensively validated in the United States, its use in other developed nations has been limited. This article examines the performance of the system in 2 Canadian provinces and assesses the extent to which ACGs can account for same-year and next-year health care expenditures. METHODS. The study population included all residents of Manitoba and British Columbia who were continuously enrolled in the provincial health plans from April 1,1995, to March 31, 1997. ACGs were assigned through diagnoses from fee-for-service physician claims and hospital separation records. "Physician" costs were calculated from the fee-for-service tariffs, and for Manitobans, "total" costs were also computed by combining physician and hospital costs. Linear regression was used to examine the ability of the ACG system to explain variation in individual costs (truncated at the 99th percentile). RESULTS. The British Columbia and Manitoba data were generally acceptable, with fewer than 2% rejected diagnoses. Higher costs were associated with both the accumulation of morbidities and their relative severity. For physician costs, the ACG system explained similar to 50% and similar to 25% of the variation in same-year and next-year truncated costs, respectively. For total casts, the system explained similar to 40% and similar to 14% of these respective costs. CONCLUSIONS. The application of ACGs in Canada is feasible using existing data. The ability of the ACG system to explain variation in costs is similar to that found in US health systems. While application of ACGs in Canada shows promise, further research is required to examine how closely they reflect population morbidity burdens and health care needs.