Longer stays in the NICU lead to lower costs

It seems common sense that the longer you stay in the hospital, the more it is going to cost you. Researchers from SAS Analytics and Duke University Health System set out to find if that is actually true in regards to patients in the neonatal intensive care unit (NICU).

For patients, a shorter length of stay (LOS) means more time at home and less chance of developing a hospital- acquired complication. Do these shorter LOS’s actually make more money for hospital and are they the best for the patient? The study looked into this question.

SAS Analytics used a discrete event simulation model of the Duke University Hospital NICU to determine the relationship between LOS and cost per patient. The event model inputs data including size, structure, nursing practices, patient demographics and patient outcomes over the course of five years at Duke’s NICU. 

In the simulation, the results tabulated were not statically different from actual data. Results showed that a longer LOS (27 days vs. 24 days) reduced costs per patient. The 27-day LOS averaged a cost of $16,400 per patient, while a 24-day LOS averaged $19,700. For infants born with 28 weeks or less of gestation, the costs per patient were $56,000 vs. $76,700, respectively.

“Our simulation model is, to our knowledge, the first prospective model system that has been validated to actual NICU performances. Its ability to adequately model variations in LOS by using probability distributions for neonatal morbidity and admission inputs represents a unique tool to both drive unit innovation and understand complex relationships among costs,” writes Chris DeRienzo, MD, MPP, and leader on the study. “Contrary to current belief, our model demonstrates that shorter LOS is not uniformly associated with reduced hospital resource utilization. These results suggest hospital leaders and government agencies should strongly consider adding high-fidelity modeling to identify cost saving opportunities rather than simply relying on initiatives to reduce LOS.