Pediatric patients, race, and DRG prospective hospital payment.

The diagnosis related group (DRG) prospective hospital payment system contains inequities in hospital payment for certain groups of patients. Patients of lower socioeconomic status may be underreimbursed by DRGs. We analyzed pediatric patients and hospital resource consumption by race (white, Hispanic, and black) using a DRG prospective payment "all payer" system. All hospitalized pediatric admissions over a 3-year period (N = 14,489) were analyzed by race at a large academic medical center. Mean hospital length of stay and cost per patient (adjusted for DRG weight index) was significantly greater for black and Hispanic pediatric patients compared with whites. Financial risk as measured by outliers and losses under DRGs was greater for blacks and Hispanics compared with whites. Black and Hispanic patients had a higher proportion of emergency admission to the hospital compared with whites, a greater severity of illness (as measured by total International Classification of Diseases, ninth revision, Clinical Modification codes), and (on average) higher diagnostic costs for each episode of illness. Our data suggest that black and Hispanic pediatric patients have a greater hospital resource consumption (adjusted for DRG group case mix) compared with whites, at least at our large medical center in the Northeast. Hospitals that treat greater numbers of black and Hispanic pediatric patients may be at a substantial disadvantage under per-case DRG payment.