Room and board cost components by clinical department in Connecticut's hospitals: Differences between adult and pediatric age groups in routine care, special care, and ancillary charges by selected DRGs

he current per diem pricing of hospital Routine Nursing and Room and Board expenses by the Prospective Payment System, when the actual nursing cost of patients is highly variable, may compress Diagnosis Related Groups (DRG) prices and unfairly reimburse hospitals. Previous studies have demonstrated that Nursing cost PPD are highly variable within and across DRGs. This research examined issues relating to the equity of the per diem Room and Board costing of DRGs in the Prospective Payment System. A Department based methodology of Room and Board Cost that could be used to weight DRG costs was defined. Second the variability of nursing and non-nursing Room and Board Cost were examined across departments in Connecticut's 35 short term, general hospitals for fiscal year 1985. These data demonstrated a significant difference in Room and Board and Nursing Component costs PPD and PPS among hospital departments. The Pediatrics departments had a significantly higher cost PPD than all other Routine departments. Factors such as economies of scale and nursing personnel were examined as factors in the high pediatric costs. Third, Room and Board charge differences were compared within selected DRGs for two age groups (0-15 years and...