Healthcare Quarterly

Healthcare Quarterly 11(3) May 2008 : 104-104.doi:10.12927/hcq.2008.19860

Facts-at-a-Glance: Factoring in Why Hospitalization Costs Vary


There are many factors that affect the cost of treating a patient admitted to hospital. Using CMG+, the latest case mix grouping methodology from the Canadian Institute for Health Information (CIHI), it is possible to see how various factors can influence acute care hospitalization costs among typical patients (excluding transfers, deaths, sign-outs and long-stay cases). Hospitalization costs are for 2005-2006 and exclude physician compensation.
Factor: Age category (the age of a patient)
Example of how factor influences cost: Typical patients aged 18 to 59 years treated in hospital for Parkinson's disease, on average, cost hospitals $4,603, compared to $8,397 for typical patients 80 years and older. The difference in costs may be due to similar conditions requiring different types of services and tests and the time needed to heal or recover from treatments.

Factor: Co-morbidity level (the number of illnesses a patient has beyond the main reason for hospitalization)
Example of how factor influences cost: The hospitalization cost of treating typical patients aged 60 to 79 years who had a gallbladder removed was, on average, $3,234 for patients who had no additional illnesses, compared to $4,900 for patients with other illnesses.

Factor: Flagged intervention (specific "flagged" procedures associated with higher resource consumption, such as dialysis)
Example of how factor influences cost: For typical patients aged 18 to 59 years with admissions involving pneumonia, the average cost per case for those without a flagged intervention was $3,056, versus $16,753 for those with two flagged interventions.

Factor: Intervention events (the number of specified intervention events that are performed in a single hospital visit)
Example of how factor influences cost: When we compare typical bypass surgery patients who had one intervention event to those who had two during a single hospital admission, the average hospitalization cost nearly doubled; that is, $11,561 compared to $22,168.

Factor: Out-of-hospital (OOH) interventions (selective interventions that are performed outside the treating/admitting facility)
Example of how factor influences cost: For typical patients aged 80 years and older who were admitted into hospital for a pacemaker implantation or removal, undergoing the procedure as an OOH intervention cost the admitting hospital, on average, $6,385, compared to $11,226 per patient who had the procedure performed at the admitting facility. Please note that although the cost of an OOH intervention may be lower to the admitting facility, the total cost of hospitalization shared between two facilities may be higher.


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