Sponsored by the Health Administrations of nine cantons, this study was conducted by the University Institute of Social and Preventive Medicine in Lausanne in order to assess how DRGs could be used within the Swiss context. A data base mainly provided by the Swiss VESKA statistics was used. The first step provided the transformation of Swiss diagnostic and intervention codes into US codes, allowing direct use of the Yale Grouper for DRG. The second step showed that the overall performance of DRG in terms of variability reduction of the length of stay was similar to the one observed in US; there are, however, problems when the homogeneity of medicotechnical procedures for DRG is considered. The third steps showed how DRG could be used as an account unit in hospital, and how costs per DRG could be estimated. Other examples of applications of DRG were examined, for example comparison of Casemix or length of stay between hospitals.