Incremental Costs Associated with Length of Hospitalization Due to Viral Pneumonia: Impact of Intensive Care and Economic Implications of Reducing the Length of Stay in the Era of COVID-19

Background Emerging trial data for treatment of COVID-19 suggest that in addition to improved clinical outcomes, these treatments reduce length of hospital stay (LOS). However, the economic value of a shortened LOS is unclear. Objective To estimate incremental costs per day of hospitalization for a patient with influenza or viral pneumonia, as a proxy for COVID-19; ICU costs associated with invasive mechanical ventilation (iMV) were also determined. Methods Retrospective analysis of claims-based data was conducted using the IBM MarketScan® Commercial Claims and Encounters and Medicare Supplemental and Coordination of Care and the Medicare Fee-for-Service claims databases for hospitalizations due to influenza/viral pneumonia between January 2018 and June 2019. Cases were stratified as uncomplicated hospitalizations or with ICU. Ordinary least squares regression, excluding LOS or costs exceeding the 99th percentile (base case), was used to estimate incremental costs per day; a sensitivity analysis included all qualified hospitalizations. Additional sensitivity analyses used weighting methodology. Results Among 6055 and 118,419 hospitalizations in the commercially insured and Medicare databases, respectively, 5958 and 116,552 hospitalizations, respectively, represented the base case. Estimated incremental base case costs per additional inpatient day were $2158 and $3900 in the commercial population for uncomplicated hospitalizations and hospitalizations with ICU, respectively, and $475 and $668, respectively in the Medicare population. Estimated incremental base case costs per additional ICU day were $5254 and $608 for Commercial and Medicare populations, respectively. Higher absolute costs were estimated in the sensitivity analysis on all qualified hospitalizations; the weighted sensitivity analyses generally showed that estimates were stable. Use of iMV increased costs by $35,482 and $13,101 in the commercial and Medicare populations, respectively. Conclusion The incremental daily cost of a hospitalization is substantial for US patients with commercial insurance and for Medicare patients. These findings may help quantify the economic value of COVID-19 treatments that reduce LOS.