Resource Utilization Among Neonatologists in a University Children's Hospital

Objective. We studied factors affecting length of hospital stay and resulting hospital charges among patients managed by two separate groups of neo- natologists in the same academic health science center. Design. Retrospective analysis of clinical and finan- cial data base information. Methods. Neonatal intensive care was provided in the same acute care nursery in a large university chil- dren's hospital by: (1) neonatologists in a full-time aca- demic division (group A) and (2) a group associated with a private managed care organization (group B). Clinical and financial parameters of all neonates admitted in fiscal year 1994 were compared for the two provider groups. Stepwise regression analysis was used to evalu- ate factors influencing hospital charges and length of hospital stay (LOS) and to adjust for differences in clin- ical variables between the two groups. Results. Group A physicians provided care for 340 infants, while 137 were treated by those of group B. Group A included older patients, more outborns, more level III patients, more sepsis, more intermittent positive pressure ventilation, and more patent ductus arteriosus. The incidence of transient tachypnea of the newborn was higher among group B patients. Hospital charges were primarily determined by LOS, which was similar for the two groups. When the data were corrected for differences in risk and patient acuity, however, a significant relation- ship between physician group and LOS was demon- strated, with LOS being an average of 7.8 days shorter for group A. A net reduction of $3 114 969 in hospital charges might have been realized had group A physicians pro- vided care for all study patients. Conclusions. Hospital charges were determined by LOS. In this setting, academic neonatologists produced shorter LOS and comparable clinical outcomes, despite caring for a population at greater risk. The reduction in LOS could have resulted in more than $3.1 million in annualized savings had the academic group provided care for all of the study patients. Pediatrics 1997;99(6). URL: http://www.pediatrics.org/cgi/content/full/99/6/e2; resource utilization, hospital changes, length of stay, neo- natologists. ABBREVIATIONS. LOS, average length of hospital stay; PDA, patent ductus arteriosus. Steep increases in health care costs over the past decade have stimulated demands for cost contain- ment, particularly among large corporate purchasers of group health insurance. Numerous strategies for controlling health care costs have been marketed under the concept of managed care. Data are lacking regarding the impact of these market-driven health care strategies on children, particularly the care of the neonate. Academic health science center hospitals, includ- ing children's hospitals and their associated medical school faculty, often are depicted as being unable to deliver cost-effective health care. 1 Such institutions are deemed costly because of high rates of uncom- pensated care and cost shifting, personnel-intense and technology-oriented delivery systems, and their central role in development of innovative (and ex- pensive) new medical techniques. Patient care by medical school physicians is viewed as costly, and possibly inefficient, in comparison to the private sec- tor because of participation of physicians in training, detailed laboratory testing, and unwillingness to consider approaches that may compromise per- ceived standards of care. The high cost of neonatal intensive care is of particular concern. Despite the rhetoric surrounding these issues, little objective in- formation is available concerning the cost of neonatal care provided by academic physicians compared with physicians associated with managed care orga- nizations. Indicators most commonly used to analyze re- source utilization are hospital charges and length of hospital stay (LOS). Recent publications have em- phasized LOS as the primary determinant of cost of neonatal care 2,3 because of its relationship to low birth weight. Reduced costs have been demonstrated in association with nursery strategies that reduce LOS. 4,5