Objective: To use information about prevalence, cost, and variation in resource utilization to prioritize comparative effectiveness research topics in hospital pediatrics.
Design: Retrospective analysis of administrative and billing data for hospital encounters.
Setting: Thirty-eight freestanding US children's hospitals from January 1, 2004, through December 31, 2009.
Participants: Children hospitalized with conditions that accounted for either 80% of all encounters or 80% of all charges.
Main outcome measures: Condition-specific prevalence, total standardized cost, and interhospital variation in mean standardized cost per encounter, measured in 2 ways: (1) intraclass correlation coefficient, which represents the fraction of total variation in standardized costs per encounter due to variation between hospitals; and (2) number of outlier hospitals, defined as having more than 30% of encounters with standardized costs in either the lowest or highest quintile across all encounters.
Results: Among 495 conditions accounting for 80% of all charges, the 10 most expensive conditions accounted for 36% of all standardized costs. Among the 50 most prevalent and 50 most costly conditions (77 in total), 26 had intraclass correlation coefficients higher than 0.10 and 5 had intraclass correlation coefficients higher than 0.30. For 10 conditions, more than half of the hospitals met outlier hospital criteria. Surgical procedures for hypertrophy of tonsils and adenoids, otitis media, and acute appendicitis without peritonitis were high cost, were high prevalence, and displayed significant variation in interhospital cost per encounter.
Conclusions: Detailed administrative and billing data can be used to standardize hospital costs and identify high-priority conditions for comparative effectiveness research--those that are high cost, are high prevalence, and demonstrate high variation in resource utilization.