Financial Implications of Short Stay Pediatric Hospitalizations.

BACKGROUND: Observation status (OBS) stays incur similar costs to low-acuity, short-stay inpatient (IP) hospitalizations. Despite this, payment for OBS is likely less and may represent a financial liability for children's hospitals. Thus, we described the financial outcomes associated with OBS stays compared to similar IP stays by hospital and payer. METHODS: We conducted a retrospective cohort study of clinically similar pediatric OBS and IP encounters at 15 hospitals contributing to the revenue management program in 2017. Clinical and demographic characteristics were described. For each hospitalization, the cost coverage ratio (CCR) was calculated by dividing revenue by estimated cost of hospitalization. Differences in CCR were evaluated using Wilcoxon rank sum tests and results were stratified by billing designation and payer. CCR for OBS and IP stays were compared by institution, and the estimated increase in revenue by billing OBS stays as IP was calculated. RESULTS: OBS was assigned to 70 981 (56.9%) of 124 789 hospitalizations. Use of OBS varied across hospitals (8%-86%). For included hospitalizations, OBS stays were more likely than IP stays to result in financial loss (57.0% vs 35.7%). OBS stays paid by public payer had the lowest median CCR (0.6; interquartile range [IQR], 0.2-0.9). Paying OBS stays at the median IP rates would have increased revenue by $167 million across the 15 hospitals. CONCLUSIONS: OBS stays were significantly more likely to result in poor financial outcomes than similar IP stays. Costs of hospitalization and billing designations are poorly aligned and represent an opportunity for children's hospitals and payers to restructure payment models.

The Association of the Childhood Opportunity Index on Pediatric Readmissions and Emergency Department Revisits.

OBJECTIVE: Reutilization following discharge is costly to families and the health care system. Singular measures of the social determinants of health (SDOH) have been shown to impact utilization; however, the SDOH are multifactorial. The Childhood Opportunity Index (COI) is a validated approach for comprehensive estimation of the SDOH. Using the COI, we aimed to describe the association between SDOH and 30-day revisit rates. METHODS: This retrospective study included children 0 to 17 years within 48 children's hospitals using the Pediatric Health Information System from 1/1/2019 to 12/31/2019. The main exposure was a child's ZIP code level COI. The primary outcome was unplanned readmissions and emergency department (ED) revisits within 30 days of discharge. Primary outcomes were summarized by COI category and compared using chi-square or Kruskal-Wallis tests. Adjusted analysis used generalized linear mixed effects models with adjustments for demographics, clinical characteristics, and hospital clustering. RESULTS: Of 728,997 hospitalizations meeting inclusion criteria, 30-day unplanned returns occurred for 96,007 children (13.2%). After adjustment, the patterns of returns were significantly associated with COI. For example, 30-day returns occurred for 19.1% (95% confidence interval [CI]: 18.2, 20.0) of children living within very low opportunity areas, with a gradient-like decrease as opportunity increased (15.5%, 95% CI: 14.5, 16.5 for very high). The relative decrease in utilization as COI increased was more pronounced for ED revisits. CONCLUSIONS: Children living in low opportunity areas had greater 30-day readmissions and ED revisits. Our results suggest that a broader approach, including policy and system-level change, is needed to effectively reduce readmissions and ED revisits.

Healthcare Encounter and Financial Impact of COVID-19 on Children's Hospitals.

Children's hospitals responded to COVID-19 by limiting nonurgent healthcare encounters, conserving personal protective equipment, and restructuring care processes to mitigate viral spread. We assessed year-over-year trends in healthcare encounters and hospital charges across US children's hospitals before and during the COVID-19 pandemic. We performed a retrospective analysis, comparing healthcare encounters and inflation-adjusted charges from 26 tertiary children's hospitals reporting to the PROSPECT database from February 1 to June 30 in 2019 (before the COVID-19 pandemic) and 2020 (during the COVID-19 pandemic). All children's hospitals experienced similar trends in healthcare encounters and charges during the study period. Inpatient bed-days, emergency department visits, and surgeries were lower by a median 36%, 65%, and 77%, respectively, per hospital by the week of April 15 (the nadir) in 2020 compared with 2019. Across the study period in 2020, children's hospitals experienced a median decrease of $276 million in charges.

Observation Status Stays With Low Resource Use Within Children's Hospitals.

BACKGROUND: High costs associated with hospitalization have encouraged reductions in unnecessary encounters. A subset of observation status patients receive minimal interventions and incur low use costs. These patients may contain a cohort that could safely be treated outside of the hospital. Thus, we sought to describe characteristics of low resource use (LRU) observation status hospitalizations and variation in LRU stays across hospitals. METHODS: We conducted a retrospective cohort study of pediatric observation encounters at 42 hospitals contributing to the Pediatric Health Information System database from January 1, 2019, to December 31, 2019. For each hospitalization, we calculated the use ratio (nonroom costs to total hospitalization cost). We grouped stays into use quartiles with the lowest labeled LRU. We described associations with LRU stays and performed classification and regression tree analyses to identify the combination of characteristics most associated with LRU. Finally, we described the proportion of LRU hospitalizations across hospitals. RESULTS: We identified 174 315 observation encounters (44 422 LRU). Children <1 year (odds ratio [OR] 3.3; 95% confidence interval [CI] 3.1-3.4), without complex chronic conditions (OR 3.6; 95% CI 3.2-4.0), and those directly admitted (OR 4.2; 95% CI 4.1-4.4) had the greatest odds of experiencing an LRU encounter. Those children with the combination of direct admission, no medical complexity, and a respiratory diagnosis experienced an LRU stay 69.5% of the time. We observed variation in LRU encounters (1%-57% of observation encounters) across hospitals. CONCLUSIONS: LRU observation encounters are variable across children's hospitals. These stays may include a cohort of patients who could be treated outside of the hospital.

Observation Encounters and Length of Stay Benchmarking in Children's Hospitals.

BACKGROUND AND OBJECTIVES: Length of stay (LOS) is a common benchmarking measure for hospital resource use and quality. Observation status (OBS) is considered an outpatient service despite the use of the same facilities as inpatient status (IP) in most children's hospitals, and LOS calculations often exclude OBS stays. Variability in the use of OBS by hospitals may significantly impact calculated LOS. We sought to determine the impact of including OBS in calculating LOS across children's hospitals. METHODS: Retrospective cohort study of hospitalized children (age <19 years) in 2017 from the Pediatric Health Information System (Children's Hospital Association, Lenexa, KS). Normal newborns, transfers, deaths, and hospitals not reporting LOS in hours were excluded. Risk-adjusted geometric mean length of stay (RA-LOS) for IP-only and IP plus OBS was calculated and each hospital was ranked by quintile. RESULTS: In 2017, 45 hospitals and 625 032 hospitalizations met inclusion criteria (IP = 410 731 [65.7%], OBS = 214 301 [34.3%]). Across hospitals, OBS represented 0.0% to 60.3% of total discharges. The RA-LOS (SD) in hours for IP and IP plus OBS was 75.2 (2.6) and 54.3 (2.7), respectively (P < .001). For hospitals reporting OBS, the addition of OBS to IP RA-LOS calculations resulted in a decrease in RA-LOS compared with IP encounters alone. Three-fourths of hospitals changed ≥1 quintile in LOS ranking with the inclusion of OBS. CONCLUSIONS: Children's hospitals exhibit significant variability in the assignment of OBS to hospitalized patients and inclusion of OBS significantly impacts RA-LOS calculations. Careful consideration should be given to the inclusion of OBS when determining RA-LOS for benchmarking, quality and resource use measurements.

Room Costs for Common Pediatric Hospitalizations and Cost-Reducing Quality Initiatives.

BACKGROUND: Improvement initiatives promote safe and efficient care for hospitalized children. However, these may be associated with limited cost savings. In this article, we sought to understand the potential financial benefit yielded by improvement initiatives by describing the inpatient allocation of costs for common pediatric diagnoses. METHODS: This study is a retrospective cross-sectional analysis of pediatric patients aged 0 to 21 years from 48 children's hospitals included in the Pediatric Health Information System database from January 1, 2017, to December 31, 2017. We included hospitalizations for 8 common inpatient pediatric diagnoses (seizure, bronchiolitis, asthma, pneumonia, acute gastroenteritis, upper respiratory tract infection, other gastrointestinal diagnoses, and skin and soft tissue infection) and categorized the distribution of hospitalization costs (room, clinical, laboratory, imaging, pharmacy, supplies, and other). We summarized our findings with mean percentages and percent of total costs and used mixed-effects models to account for disease severity and to describe hospital-level variation. RESULTS: For 195 436 hospitalizations, room costs accounted for 52.5% to 70.3% of total hospitalization costs. We observed wide hospital-level variation in nonroom costs for the same diagnoses (25%-81% for seizure, 12%-51% for bronchiolitis, 19%-63% for asthma, 19%-62% for pneumonia, 21%-78% for acute gastroenteritis, 21%-63% for upper respiratory tract infection, 28%-69% for other gastrointestinal diagnoses, and 21%-71% for skin and soft tissue infection). However, to achieve a cost reduction equal to 10% of room costs, large, often unattainable reductions (>100%) in nonroom cost categories are needed. CONCLUSIONS: Inconsistencies in nonroom costs for similar diagnoses suggest hospital-level treatment variation and improvement opportunities. However, individual improvement initiatives may not result in significant cost savings without specifically addressing room costs.