Observation Status Stays With Low Resource Use Within Children’s Hospitals

BACKGROUND: High costs associated with hospitalization have encouraged reductions in unnecessary encounters. A subset of observation status patients receive minimal interventions and incur low use costs. These patients may contain a cohort that could safely be treated outside of the hospital. Thus, we sought to describe characteristics of low resource use (LRU) observation status hospitalizations and variation in LRU stays across hospitals. METHODS: We conducted a retrospective cohort study of pediatric observation encounters at 42 hospitals contributing to the Pediatric Health Information System database from January 1, 2019, to December 31, 2019. For each hospitalization, we calculated the use ratio (nonroom costs to total hospitalization cost). We grouped stays into use quartiles with the lowest labeled LRU. We described associations with LRU stays and performed classification and regression tree analyses to identify the combination of characteristics most associated with LRU. Finally, we described the proportion of LRU hospitalizations across hospitals. RESULTS: We identified 174 315 observation encounters (44 422 LRU). Children <1 year (odds ratio [OR] 3.3; 95% confidence interval [CI] 3.1-3.4), without complex chronic conditions (OR 3.6; 95% CI 3.2-4.0), and those directly admitted (OR 4.2; 95% CI 4.1-4.4) had the greatest odds of experiencing an LRU encounter. Those children with the combination of direct admission, no medical complexity, and a respiratory diagnosis experienced an LRU stay 69.5% of the time. We observed variation in LRU encounters (1%-57% of observation encounters) across hospitals. CONCLUSIONS: LRU observation encounters are variable across children's hospitals. These stays may include a cohort of patients who could be treated outside of the hospital.