Current methods of contracting for patient treatment in the health service are not suitable for elderly patients with multiple pathology and functional impairment. This study examines Resource Utilization Groups (RUGs) for use in geriatric medicine in England and Wales, based on 1675 patients from 26 hospitals in eight health districts in England and Wales. Nurses completed a questionnaire on the clinical characteristics of patients required to allocate them to one of 44 RUG groups. Nurse/patient contact times were recorded over a 24-hour period. Therapist/patient contact times were recorded for a week. Data were analysed using analysis of variance with time as independent and RUG group as dependent variable. Variance explanation in excess of 45% was achieved in acute and rehabilitation wards. In long-stay wards, variance explanation (23%) was no better than ADL score alone. RUG-III could form the basis of a casemix system for geriatrics in England and Wales in acute and rehabilitation settings.

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