Impact of Omitting Observation-Status Data on Hospital Readmission Metric for Pediatric Care

OBJECTIVES Literature from Medicare beneficiaries suggests that hospital readmission metrics limited to inpatient encounters, omitting observation-status data, may not fully capture hospital performance and affect rankings. The impact of omitting observation-status data on this metric at the pediatric population level has not been fully assessed. STUDY DESIGN This retrospective cohort study analyzed hospital stays for pediatric patients younger than 18 years old, using Healthcare Cost and Utilization Project state-specific databases from 5 states (Georgia, Iowa, Maryland, Nebraska, and Wisconsin) spanning 2016–2019. The primary outcome was the percentile change in hospital ranks based on 30-day risk-adjusted hospital readmission rates with and without observation-status data. We assessed correlations of the percentile change in hospital ranks with hospital-level percentage of observation-status use and with hospital pediatric care capability, reflecting diversity and complexity of pediatric care offered by a hospital. RESULTS There were a total of 288 149 and 205 107 eligible initial inpatient and observation stays, respectively. The 30-day unadjusted readmission rate was significantly different between the 2 groups of initial stays: 5.10% and 7.55% after initial observation and inpatient stays, respectively (P value <0.001). Hospitals with higher observation-status use tended to shift toward worse ranking positions after including observation-status data, whereas hospitals with lower observation-status use tended to shift toward better ranking positions. This pattern was particularly evident among tertiary children’s hospitals, which had a median improvement of 11.9 percentile points. CONCLUSIONS Hospitals with lower observation-status use were ranked lower for pediatric care when using the inpatient-only metric, with a disproportionately negative impact on tertiary children’s hospitals.