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Background: Hospitalizations represent a significant driver of healthcare costs for children. Little is known about how payor type and the severity of children cared for on the pediatric medical inpatient floor impact a hospital’s financial outcomes. Objective: The primary objective of this study is to compare financial outcomes of pediatric hospitalizations to the medical inpatient floor across patient severity quartiles. Secondary objectives included financial outcomes stratified by payor type across severity quartiles. Methods: Retrospective cohort study included children aged 0-18 years discharged during calendar year 2019 from hospitals that reported clinical information to the Pediatric Health Information System database and financial data to the Revenue Management Program (Children’s Hospital Association, CHA). We excluded newborns, surgical and OB admissions, children requiring PICU or NICU, and transfers in and out. We calculated the ratio of reimbursements to costs (CCR; CCR <1.0 represents a financial liability to hospitals) and compared the CCR across severity quartiles and by payor type. A net margin median was calculated as median reimbursement minus median costs. Severity was determined using the Hospitalization Resource Intensity Score for Kids (H-Risk). Results: This study included 163,656 children within 14 children’s hospitals. Patients were divided equally among four quartiles of H-Risk with quartile 1 being the least severe and quartile 4 the most. The majority of patients had a public payor (54.4%). As severity increased the number of children with chronic complex conditions increased (CCC; 6.8% with 1 or greater CCC for quartile 1 and 78.7% for quartile 4) and length of stay increased (a geometric mean of 1.4 days for quartile 1 and 3 days for quartile 4). Overall, the CCR was 1.1 across all payors and severity levels representing a slight positive margin. Among private payors the CCR varied from 1.6 to 1.7 across severity quartiles which resulted in a median net positive margin $2,544 in quartile 1 and $7,855 in quartile 4. Among public payors the CCR varied from 0.7 to 0.8 across severity quartiles which resulted in a median net negative margin of ($1,404) in quartile 1 and ($905) in quartile 4. Conclusions: Net financial outcomes varied substantially by payor. Utilizing the CCR in conjunction with the patient severity may inform payment models and hospital operations, such as staffing models and patient placement, to ensure financial solvency.

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When and Where Presented

Presented at 2022 PAS Conference; Denver, CO; April 2022.

Financial Outcomes by Severity Across Children's Hospitals

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Pediatrics Commons