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

Area of Science:

• Pediatric Healthcare Management
• Health Economics
• Hospital Operations

Background:

• Improvement initiatives aim to enhance pediatric patient care safety and efficiency.
• However, these initiatives may yield limited financial benefits.
• Understanding inpatient cost allocation is crucial for assessing potential cost savings.

Purpose of the Study:

• To describe the inpatient cost distribution for common pediatric diagnoses.
• To identify potential financial benefits of improvement initiatives in pediatric hospitalizations.

Main Methods:

• Retrospective cross-sectional analysis of 195,436 pediatric hospitalizations (0-21 years) from 2017.
• Included 8 common diagnoses and categorized costs (room, clinical, lab, imaging, pharmacy, supplies, other).
• Used mixed-effects models to account for disease severity and hospital-level variation.

Main Results:

• Room costs constituted 52.5% to 70.3% of total hospitalization costs.
• Significant hospital-level variation observed in non-room costs across diagnoses (e.g., 25%-81% for seizure).
• Achieving 10% room cost reduction necessitates >100% reduction in non-room costs.

Conclusions:

• Variations in non-room costs suggest opportunities for treatment standardization.
• Significant cost savings from improvement initiatives require a focus on reducing room costs.
• Individual initiatives may not yield substantial savings without addressing room cost components.