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Pediatric patients, race, and DRG prospective hospital payment
E Munoz1, E Barrios, H Johnson
1Department of Surgery, Long Island Jewish Medical Center, New Hyde, NY 11042.
Insights
Diagnosis Related Groups (DRGs) may underreimburse hospitals for Black and Hispanic pediatric patients. These groups consumed more resources, indicating potential financial disadvantages for healthcare providers under the current payment system.
Area of Science:
- Health Economics
- Pediatric Health Services Research
- Health Equity
Background:
- The Diagnosis Related Group (DRG) prospective hospital payment system aims for standardized reimbursement.
- Potential inequities exist within the DRG system, particularly for vulnerable patient populations.
- Previous research suggests socioeconomic status may influence DRG reimbursement.
Purpose of the Study:
- To analyze hospital resource consumption and payment inequities for pediatric patients across racial groups under the DRG system.
- To investigate whether race influences hospital costs and financial risk for pediatric admissions.
- To identify potential disadvantages for hospitals serving a higher proportion of minority pediatric patients.
Main Methods:
- Retrospective analysis of 14,489 pediatric hospital admissions over 3 years at a large academic medical center.
- Comparison of hospital length of stay, cost per patient (adjusted for DRG weight index), and financial risk (outliers, losses) by race (white, Hispanic, black).
- Assessment of admission type, severity of illness (using ICD-9-CM codes), and diagnostic costs across racial groups.
Main Results:
- Black and Hispanic pediatric patients exhibited significantly longer hospital stays and higher costs per patient compared to white patients, even after adjusting for DRG weight.
- Financial risk, measured by outliers and losses, was greater for Black and Hispanic patients.
- Black and Hispanic patients had higher rates of emergency admissions, greater severity of illness, and increased diagnostic costs per episode of care.
Conclusions:
- Black and Hispanic pediatric patients consumed greater hospital resources (adjusted for case mix) than white patients at this academic medical center.
- Hospitals with a higher volume of Black and Hispanic pediatric patients may face substantial financial disadvantages under the per-case DRG payment system.
- The DRG payment system may contain inherent inequities that disproportionately affect minority pediatric populations and the hospitals serving them.
Abstract:
The diagnosis related group (DRG) prospective hospital payment system contains inequities in hospital payment for certain groups of patients. Patients of lower socioeconomic status may be underreimbursed by DRGs. We analyzed pediatric patients and hospital resource consumption by race (white, Hispanic, and black) using a DRG prospective payment "all payer" system. All hospitalized pediatric admissions over a 3-year period (N = 14,489) were analyzed by race at a large academic medical center. Mean hospital length of stay and cost per patient (adjusted for DRG weight index) was significantly greater for black and Hispanic pediatric patients compared with whites. Financial risk as measured by outliers and losses under DRGs was greater for blacks and Hispanics compared with whites. Black and Hispanic patients had a higher proportion of emergency admission to the hospital compared with whites, a greater severity of illness (as measured by total International Classification of Diseases, ninth revision, Clinical Modification codes), and (on average) higher diagnostic costs for each episode of illness. Our data suggest that black and Hispanic pediatric patients have a greater hospital resource consumption (adjusted for DRG group case mix) compared with whites, at least at our large medical center in the Northeast. Hospitals that treat greater numbers of black and Hispanic pediatric patients may be at a substantial disadvantage under per-case DRG payment.