The Elephant in the Hospital Room Charge

The parents of a child recently hospitalized for 3 days for bronchiolitis receive the bill in the mail for their child’s hospital stay. They are stunned by the total amount of the bill. They notice that the hospital room charge accounts for nearly three-fourths of the billed amount. The bill provides no information about the room charge. The parents wonder, “What is this charge? What goes into it? Why is it so expensive?” They are grateful that the bill is covered almost fully by their child’s health insurance.

In the current issue of Pediatrics, Synhorst et al¹  assessed variation across children’s hospitals in the cost of care for pediatric patients hospitalized with asthma, bronchiolitis, and other common pediatric illnesses. Patients’ hospital rooms accounted for the majority of total hospital costs, whereas nonroom costs (eg, medications, laboratory testing) contributed much less. The authors concluded that initiatives to improve the quality of hospital care for common pediatric illnesses have limited opportunity to meaningfully reduce costs without addressing hospital room costs.

Synhorst et al¹  highlight the difficulty of conducting research on hospital cost of care using administrative data that provide little information about the biggest expense on the bill: the patient’s room. Although Synhorst et al¹  suggest that room costs broadly include overhead and staffing expenses, there are neither established definitions nor criteria for what specific items constitute hospital room versus nonroom costs. This makes it challenging to interpret allocations and variations of room and nonroom costs across hospitals. This also makes it difficult to speculate how much cost containment of room and nonroom items might be possible through improvements in quality of care delivery.

So, what specific items might be responsible for the “sticker shock”²  that some readers may experience when reviewing the findings on hospital room cost reported by Synhorst et al?¹ 

First, most hospital rooms are built with exclusive features to ensure that patients get the treatments and other health services that they need, delivered safely and effectively, on demand. Examples of features include a powered hospital bed (with electronic positioning and adjustable split rails) and specialized wall outlets, flow meters, and gauges for medical gases and negative-pressure suction. National Fire Protection Agency standards require installation and maintenance of electric sockets equipped with emergency back-up power. The rooms’ heating, ventilation, and air-conditioning systems are customized (eg, with germicidal or high-efficiency particulate absorption filters) to circulate the cleanest air possible.

Second, there is a vital, extensive, and complicated network of equipment, supplies, individuals, and systems required outside of the room for the features inside of it to function. For example, consider all of the things needed to provide oxygen in a hospital room to treat hypoxia in a child admitted with bronchiolitis: (1) large, central storage system of liquid oxygen for use across multiple areas of the hospital; (2) the oxygen itself; (3) vacuum-insulated evaporator or bulk tank to concentrate the oxygen supply; (4) oxygen delivery system, including an intricate set of medical gas pipelines with zone and service valves, gauges, and vacuum regulators as well as master and area alarm systems; and (5) medical gas supply inlet(s) to the hospital room. Hospitals must staff administrators, engineers, plumbing specialists, electricians, and so on to purchase, install, and maintain these oxygen delivery items.

Third, there are likely enterprise-wide expenses that some hospitals report as room costs. These expenses may be related to core facilities and resources (eg, laboratory and radiology equipment), personnel management and leadership, quality improvement and assurance, and research. These expenses may also be related to under- or nonreimbursed health care provided by the hospital to uphold its community mission to children.

With these considerations in mind, the findings from Synhorst et al¹  underscore that the hospital room and its accompanying infrastructure are fundamentally expensive. These expenses are diagnosis agnostic; they apply immediately once a patient enters their hospital room, regardless of the admission diagnosis or severity of illness. Therefore, the most guaranteed way to minimize a hospital room cost (or avoid it entirely) is to shorten hospital length of stay (or prevent the hospitalization all together). High-quality public health, community, and outpatient care are needed to mitigate the severity of common pediatric acute illnesses so that hospital care is used only when necessary. Unfortunately, authors of previous studies report that the vast majority of pediatric patients do not receive any outpatient or community care at all before hospitalization for common pediatric illnesses.³  More attention to this paucity of care is warranted.

Beyond exploration of opportunities to improve outpatient and community care, hospital clinicians striving to understand and contain hospital costs may benefit from integrating with hospital administrators to learn more about (1) price negotiations and contracting with private vendors who manufacture and sell medical equipment and supplies (eg, oxygen and all related infrastructure items) for hospital rooms; (2) labor unions and other employee entities that help set wages, benefits, and related expenses of hospital employees (eg, engineers) who install and maintain the equipment and supplies; and (3) economic supply and demand relationships for vital treatments, like oxygen, that hospitals are obligated to deliver without failure, even during a public health crisis (eg, a season of severe influenza or a coronavirus outbreak).

We are grateful that Synhorst et al¹  draw attention to hospital cost for pediatric patients. The article calls out what we believe is the elephant responsible for hospital room costs. The elephant represents the myriad forces outside of the hospital room that drive it to be in demand, to exist, and to function properly. Synhorst et al¹  remind us that there are enormous and expensive efforts behind the clinical scenes that provide a reliable infrastructure to efficiently and safely deliver hospital care that children require to overcome common illnesses. As hospitalists and hospital leaders consider the value of quality improvement efforts, they should consider whether there may be opportunities to iteratively improve some of the hidden systems of care that drive room costs. Synhorst et al¹  do not show us that quality improvement efforts lack value. Rather, they open our eyes to the wide range of behind-the-scenes activities that too often are not considered as quality improvement initiatives but that may be ripe for standardization and improvement.