The influence of chronic disease on resource utilization in common acute pediatric conditions - Financial concerns for children's hospitals

Objectives: To estimate the resource utilization in hospitalizations for co mmon pediatric conditions dr procedures involving patients with chronic dis ease vs those with no chronic disease and to develop an economic model of h ospital per-patient profit (or loss) when insurance contracts fail to accou nt for the presence of chronic disease. Setting and Design: A retrospective analysis of selected acute pediatric co nditions found in the 1991 and 1992 MedisGroups National Comparative Data B ase. Patients: We studied 30379 pediatric admissions for common acute conditions , including concussion; croup, pneumonia, appendicitis, gastroenteritis, fr actures, cellulitis, urinary tract infection, and viral illness. Main Outcome Measures: Hospital length of stay and total hospital charges. Results: For patients without chronic disease, mean (geometric) length of s tay was 2.53 vs 3.05 days (P<.001) for patients with at least I chronic dis ease. For patients without chronic disease, mean (arithmetic) total hospita l charge was $2614 vs $3663 (P<.001) for patients with at least 1 chronic d isease. Assuming 75% of patients with chronic disease are admitted to a chi ldren's hospital vs 25% to a general hospital, overall loss per patient at the children's hospital ranged between 1.5% and 2.9%, depending on assumpti ons regarding cost-to-charge ratios and the treatment of charge outliers. P neumonia cases were associated with a 4.0% to 5.85% loss. Conclusions: Length of stay and charges are higher for everyday pediatric c onditions or procedures when patients also have a chronic disease. If insur ance contracts fail to account for chronic disease, then children's hospita ls will realize significant financial losses, and over time this will lead to a decline in their financial viability, a reduction in quality, or a cha nge in their mission.