Comparative Costs of Treating Adults and Children within Selected Diagnosis-related Groups

Abstract

There have been no large-scale analyses of resource utilization comparing the overall costs to treat pediatric patients vs adult patients. Likewise, there have been no studies evaluating the costs of the various components of hospitalization (e.g., accommodation, laboratory, radiology, and drugs) among adult and pediatric populations. To study the effect of age on the costs of treating patients, we have evaluated 43 conditions with matching diagnosis-related groups (DRGs) for children and adults. Using a database developed by the University HealthSystems Consortium, we examined the major non-physician components of hospital costs, including accommodation, surgery, pharmacy, radiology, and laboratory for 1,346,028 patient admissions to 60 University hospitals. These costs were derived from the ratio of costs to charges based on the Centers for Medicare and Medicaid Services PPS UB-2 cost reports. The total non-physician cost of treating adults was generally greater than that for children within paired DRGs. Some of this difference may be attributable to the overall longer stay of adults in hospital. For conditions that were nominally the same, radiology, laboratory, and drug costs, especially tended to be higher for adults than for children. This was most marked when the costs were evaluated on a per diem basis. There tended to be greater variability in the costs of treating children than adults within the paired DRGs, as evidenced by greater differences between the median and mean costs. Among University hospitals, the costs of managing children are typically less than for adults with the same nominal condition. In these hospitals, there tends to be less use of laboratory, radiology, and pharmacy services for children than for adults.