Room costs account for majority of pediatric hospitalization costs across common diagnoses

1. In a national, cross-sectional study of pediatric hospitalizations for 8 of the most common inpatient diagnoses in 2017, room costs made up 52.5% to 70.3% of the total hospital costs.

2. To equal a 10% reduction in room costs, an 18%-60% reduction in clinical costs would be needed, and often unattainable (>100%) reductions in laboratory, imaging, or pharmacy costs would be necessary.

Evidence Rating Level: 3 (Average)

Study Rundown: Patient outcomes are a common focus of quality improvement projects and research, though questions remain whether these interventions can also reduce hospitalization costs. Understanding the distribution of costs accrued over the course of a hospitalization could improve a health system’s ability to create cost-reducing quality initiatives targeting the most expensive areas. In this cross-sectional study, researchers used billing data from 48 children’s hospitals nationally to examine the distribution of costs across 8 common inpatient pediatric diagnoses in 2017. Room costs – the cost of providing infrastructure and staffing during the duration of a patient’s stay – comprised more than half of total hospital costs for every diagnoses. Significant and unrealistically high (>100%) reductions in clinical, laboratory, imaging, or pharmacy costs would be necessary to equal a 10% reduction in room costs.

This study was limited by its inclusion of only tertiary pediatric hospitals, which limits generalizability. Furthermore, while 8 of the most common inpatient pediatric diagnoses were examined, they captured only approximately 25% of the total hospitalized patients during the study period. Nonetheless, this study is strengthened by its large national sample. For providers, these findings highlight the importance of focusing hospital-specific, expense-reduction efforts on reducing room costs.

Click to read the study, published today in Pediatrics

Click to read an accompanying editorial in Pediatrics

Relevant reading: Choosing Wisely in Pediatric Hospital Medicine: Five Opportunities for Improved Healthcare Value

In-Depth [cross-sectional study]: Researchers used billing data from 48 children’s hospitals included in the Pediatric Health Information System database to examine the distribution of costs (room, clinical, laboratory, imaging, pharmacy, supply, and other) associated with hospitalizations in 2017. The study focused on 8 common inpatient pediatric diagnoses: seizure, bronchiolitis, asthma, pneumonia, acute gastroenteritis (AGE), upper respiratory tract infection (URI), other gastrointestinal diagnoses (GI), and skin and soft tissue infection (SSTI). Mean percentages of cost for each category were calculated.

A total of 195 436 hospital discharges were included in the final analysis. Room costs accounted for the majority of total hospital costs across all diagnoses, ranging from a mean of 52.5% for seizure to 70.3% for bronchiolitis. There was hospital-level variation in non-room costs within all diagnoses (seizure 25%-81%, bronchiolitis 12%-51%, asthma 19%–63%, pneumonia 19%–62%, AGE 21%–78%, URI 21%–63%, other GI diagnosis 28%–69%, and SSTI 21%–71%). Researchers calculated that to achieve the equivalent of a 10% reduction in room costs, often unattainable (>100%) reductions in laboratory, imaging, or pharmacy costs would be necessary. Across diagnoses, an 18%-60% reduction in clinical costs would be necessary to equal a 10% reduction in room costs.

Image: PD

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