Observation Encounters and Length of Stay Benchmarking in Children's Hospitals.

BACKGROUND AND OBJECTIVES Length of stay (LOS) is a common benchmarking measure for hospital resource use and quality. Observation status (OBS) is considered an outpatient service despite the use of the same facilities as inpatient status (IP) in most children's hospitals, and LOS calculations often exclude OBS stays. Variability in the use of OBS by hospitals may significantly impact calculated LOS. We sought to determine the impact of including OBS in calculating LOS across children's hospitals. METHODS Retrospective cohort study of hospitalized children (age <19 years) in 2017 from the Pediatric Health Information System (Children's Hospital Association, Lenexa, KS). Normal newborns, transfers, deaths, and hospitals not reporting LOS in hours were excluded. Risk-adjusted geometric mean length of stay (RA-LOS) for IP-only and IP plus OBS was calculated and each hospital was ranked by quintile. RESULTS In 2017, 45 hospitals and 625 032 hospitalizations met inclusion criteria (IP = 410 731 [65.7%], OBS = 214 301 [34.3%]). Across hospitals, OBS represented 0.0% to 60.3% of total discharges. The RA-LOS (SD) in hours for IP and IP plus OBS was 75.2 (2.6) and 54.3 (2.7), respectively (P < .001). For hospitals reporting OBS, the addition of OBS to IP RA-LOS calculations resulted in a decrease in RA-LOS compared with IP encounters alone. Three-fourths of hospitals changed ≥1 quintile in LOS ranking with the inclusion of OBS. CONCLUSIONS Children's hospitals exhibit significant variability in the assignment of OBS to hospitalized patients and inclusion of OBS significantly impacts RA-LOS calculations. Careful consideration should be given to the inclusion of OBS when determining RA-LOS for benchmarking, quality and resource use measurements.