Objective: To document the effects of a comprehensive program of care on the resource utilization and cost of care for children with chronic conditions.
Design: Descriptive study of 10715 admissions between 1984 and 1995 with analyses of costs based on charges. Comparisons were made with data from a national consortium of academic medical centers and from a national survey of hospitals. A 2-week survey of staff was conducted to identify their use of time in the care of these patients.
Patients: Children aged birth through 18 years meeting International Classification of Diseases, Ninth Revision, Clinical Modification criteria for chronic conditions. Patients with acute conditions were used as controls.
Intervention: A program of expanded care funded since 1989 by a regional insurance company.
Results: Between 1984 and 1995, mean length of stay for children with chronic conditions decreased from 83.9 to 10.6 days; mean annual admissions decreased from 2796 to 1622. Median hospital inpatient charges, adjusted for cost of living, decreased from $26.1 to $14.6 million. A $77.7 million savings occurred for inpatient care, with total expenditures from the insurance program of $3.6 million (a 21:1 ratio). Almost half the professional activities provided for these children were for services that could not be reimbursed in a fee-for-service model. Median adjusted inpatient charges were lower in Rochester, NY ($8746) than in other academic medical centers ($12773) or in a national survey of hospitals ($12462), and fewer children were readmitted within 30 days in Rochester (12.7%) than in other academic medical centers (15.0%).
Conclusions: An investment of funds by a regional insurance company was associated with reduced costs, admissions, and lengths of stay for children with chronic conditions, and resulted in significant savings for the company. This model may be applicable to other centers.