Shorter Hospital Stays Increase Costs, Lower Clinical Outcomes

September 6, 2016

Despite attempts made by hospitals to shorten patients average length of stay average (LOS) while improving health outcomes, recent research published in the Journal of Perinatology showed that shorter stays do not always reduce hospital resource utilization and costs.

The researchers examined the relationships among average LOS, cost and clinical outcomes using a neonatal intensive care unit (NICU) simulation model. They developed a discrete-event NICU simulation model based on the Duke NICU. Researchers replaced the standard probability distributions with composite distributions representing the best and worst outcomes in order to identify the relationships among average LOS, costs, and clinical outcomes.

Study results showed that the average length of stay in a NICU, for patients with the best outcomes, was three days longer than in a scenario with poor outcomes accounting for $3 million less per year.

“Using this model, we debunked what has been a pervasive tenet in health care – the belief that if you relentlessly drive down length of stay, you will universally decrease costs,” lead author, Chris DeRienzo, MD, chief quality officer at Mission Health System, said in a press release. “Our evidence shows that’s just not true. We found that in a composite NICU with the best possible outcomes, the length of stay actually averages three days longer than in a unit with poor outcomes.”


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Furthermore, researchers found that for average LOS for infants aged 28 weeks or younger were hospitalized 20 days longer than older infants; however, the average cost was nearly $20,000 less. Additionally, for longer patient stays, mortality was 75% less proportionate.

“The findings suggest that, being single-mindedly focused on this one measure [average length of stay], executives might actually be missing the boat in reducing costs and improving outcomes,” study author, David Tanaka, MD, of the Duke Children’s Hospital, said in the press release. “It’s more critically important to focus on quality outcomes – not just because it’s the right thing to do, but also because this is tangible evidence to the CFO that it’s financially the right thing to do.”

DeRienzo and colleagues concluded that health-care professionals should not solely rely on initiatives to reduce a patient’s length of stay without clearly identifying clinical outcomes. ---Julie Gould (Mazurkiewicz)



DeRienzo C, Kohler JA, Lada E, Meanor P, Tanaka D. Demonstrating the relationships of length of stay, cost and clinical outcomes in a simulated NICU [published September 1, 2016]. The Journal of Perinatology. doi:10.1038/jp.2016.128.

SAS Analytics. SAS® Analytics Simulation Debunks Myth that Shorter NICU Stays Lower Costs [press release]. September 6, 2016.