Am J Perinatol
DOI: 10.1055/a-2251-6238
Original Article

Validation of a Costing Algorithm and Cost Drivers for Neonates Admitted to the Neonatal Intensive Care Unit

Elias Jabbour
1   Division of Neonatology, Department of Pediatrics, McGill University Health Center Research Institute, Montreal, Canada
Sharina Patel
1   Division of Neonatology, Department of Pediatrics, McGill University Health Center Research Institute, Montreal, Canada
2   Division of Neonatology, Department of Pediatrics, McGill University Health Center, Montreal, Canada
Guy Lacroix
3   Department of Economics, University of Laval, Montreal, Canada
Petros Pechlivanoglou
4   Child Health Evaluative Sciences, The Hospital for Sick Children, Toronto, Canada
Prakesh S. Shah
4   Child Health Evaluative Sciences, The Hospital for Sick Children, Toronto, Canada
5   Maternal-Infant Care Research Centre and Department of Pediatrics, Mount Sinai Hospital, Toronto, Canada
Marc Beltempo
1   Division of Neonatology, Department of Pediatrics, McGill University Health Center Research Institute, Montreal, Canada
2   Division of Neonatology, Department of Pediatrics, McGill University Health Center, Montreal, Canada
On behalf of the Canadian Preterm Birth Network Investigators Canadian Neonatal Network Investigators › Author Affiliations
Funding M.B. holds an Early Career Investigator Grant from the CIHR Institute of Human Development, Child and Youth Health (IHDCYH), a research grant funding from the FRSQ Clinical Research Scholar Career Award Junior 1, and an Early Career Investigator Grant from the Montreal Children's Hospital Foundation.


Objective Neonatal intensive care units (NICUs) account for over 35% of pediatric in-hospital costs. A better understanding of NICU expenditures may help identify areas of improvements. This study aimed to validate the Canadian Neonatal Network (CNN) costing algorithm for seven case-mix groups with actual costs incurred in a tertiary NICU and explore drivers of cost.

Study Design A retrospective cohort study of infants admitted within 24 hours of birth to a Level-3 NICU from 2016 to 2019. Patient data and predicted costs were obtained from the CNN database and were compared to actual obtained from the hospital accounting system (Coût par Parcours de Soins et de Services). Cost estimates (adjusted to 2017 Canadian Dollars) were compared using Spearman correlation coefficient (rho).

Results Among 1,795 infants included, 169 (9%) had major congenital anomalies, 164 (9%) with <29 weeks' gestational age (GA), 189 (11%) with 29 to 32 weeks' GA, and 452 (25%) with 33 to 36 weeks' GA. The rest were term infants: 86 (5%) with hypoxic–ischemic encephalopathy treated with therapeutic hypothermia, 194 (11%) requiring respiratory support, and 541 (30%) admitted for other reasons. Median total NICU costs varied from $6,267 (term infants admitted for other reasons) to $211,103 (infants born with <29 weeks' GA). Median daily costs ranged from $1,613 to $2,238. Predicted costs correlated with actual costs across all case-mix groups (rho range 0.78–0.98, p < 0.01) with physician and nursing representing the largest proportion of total costs (65–82%).

Conclusion The CNN algorithm accurately predicts NICU total costs for seven case-mix groups. Personnel costs account for three-fourths of in-hospital total costs of all infants in the NICU.

Key Points

  • Very preterm infants born below 33 weeks of gestation account for most of NICU resource use.

  • Human resources providing direct patient care represented the largest portion of costs.

  • The algorithm strongly predicted total costs for all case-mix groups.


Retrospective cohort study validating a case costing algorithm and determining cost drivers of admission in the NICU. Preterm infants are the highest resource users within the NICUs. There are limited studies that compared costing estimates per patient using different algorithms. Use of case-mix groups, patient-level costs, and dividing length of stay into tertiles of stay provide insight on resource use within NICUs. The CNN algorithm strongly predicts total costs of admission for all populations admitted within tertiary-level NICUs. Personnel, namely physician and nurses, remained the highest contributors to cost in the NICU.

Authors' Contributions

E.J. led the study design progress, data acquisition, statistical analyses, and drafted the manuscript. S.P., G.L., and P.P. assisted in study design and data acquisition. P.S.S. oversaw data collection validity and original algorithm development. M.B. designed the study, supervised, and facilitated data collection, monitored analysis, and communicated insightful reviews of the manuscript. All authors have approved the final draft and agreed to be accountable for all aspects of their work.

Supplementary Material

Publication History

Received: 24 August 2023

Accepted: 19 January 2024

Accepted Manuscript online:
23 January 2024

Article published online:
16 February 2024

© 2024. Thieme. All rights reserved.

Thieme Medical Publishers, Inc.
333 Seventh Avenue, 18th Floor, New York, NY 10001, USA

  • References

  • 1 Johnston KM, Gooch K, Korol E. et al. The economic burden of prematurity in Canada. BMC Pediatr 2014; 14: 93
  • 2 Lim G, Tracey J, Boom N. et al. CIHI survey: hospital costs for preterm and small-for-gestational age babies in Canada. Healthc Q 2009; 12 (04) 20-24
  • 3 Rolnitsky A, Unger SL, Urbach DR, Bell CM. Cost of neonatal intensive care for extremely preterm infants in Canada. Transl Pediatr 2021; 10 (06) 1630-1636
  • 4 Cuevas KD, Silver DR, Brooten D, Youngblut JM, Bobo CM. The cost of prematurity: hospital charges at birth and frequency of rehospitalizations and acute care visits over the first year of life: a comparison by gestational age and birth weight. Am J Nurs 2005; 105 (07) 56-64 , quiz 65
  • 5 Beltempo, et al.; on behalf of the Canadian Neonatal Network Annual Report Committee. Canadian Neonatal Network 2018 Annual Report. 2019. Accessed August 23, 2023 at:
  • 6 Richardson DK, Zupancic JA, Escobar GJ, Ogino M, Pursley DM, Mugford M. A critical review of cost reduction in neonatal intensive care. I. The structure of costs. J Perinatol 2001; 21 (02) 107-115
  • 7 Richardson DK, Zupancic JA, Escobar GJ, Ogino M, Pursley DM, Mugford M. A critical review of cost reduction in neonatal intensive care. II. Strategies for reduction. J Perinatol 2001; 21 (02) 121-127
  • 8 Partridge JC, Robertson KR, Rogers EE, Landman GO, Allen AJ, Caughey AB. Resuscitation of neonates at 23 weeks' gestational age: a cost-effectiveness analysis. J Matern Fetal Neonatal Med 2015; 28 (02) 121-130
  • 9 Petrou S, Khan K. Economic costs associated with moderate and late preterm birth: primary and secondary evidence. Semin Fetal Neonatal Med 2012; 17 (03) 170-178
  • 10 Rolnitsky A, Urbach D, Unger S, Bell CM. Regional variation in cost of neonatal intensive care for extremely preterm infants. BMC Pediatr 2021; 21 (01) 134
  • 11 A UA. Abstracts of the 2019 New England Section of the American Urological Association Annual Meeting. Can J Urol 2019; 26 (04) 9871-9904
  • 12 Seaton SE, Draper ES, Adams M. et al; UK Neonatal Collaborative, International Network for Evaluating Outcomes of Neonates (iNeo) Investigators, ANZNN (Australian and New Zealand Neonatal Network), CNN (Canadian Neonatal Network), NRNJ (Neonatal Research Network Japan), SEN1500 (Spanish Neonatal Network), SwissNeoNet (Swiss Neonatal Network). Variations in neonatal length of stay of babies born extremely preterm: an international comparison between iNeo networks. J Pediatr 2021; 233: 26-32.e6
  • 13 Friedman KG, Fulton DR. Reducing cost through standardization. Curr Treat Options Pediatr 2016; 2 (04) 296-310
  • 14 Yeung T, Rios JD, Beltempo M. et al. The trend in costs of tertiary-level neonatal intensive care for neonates born preterm at 22(0/7)-28(6/7) weeks of gestation from 2010 to 2019 in Canada. J Pediatr 2022; 245: 72-80.e6
  • 15 Rios JD, Shah PS, Beltempo M. et al; Canadian Preterm Birth Network Investigators, Canadian Neonatal Network Investigators. Costs of neonatal intensive care for canadian infants with preterm birth. J Pediatr 2021; 229: 161-167.e12
  • 16 Shah PS, McDonald SD, Barrett J. et al; Canadian Preterm Birth Network Investigators. The Canadian Preterm Birth Network: a study protocol for improving outcomes for preterm infants and their families. CMAJ Open 2018; 6 (01) E44-E49
  • 17 Chance GW. Neonatal intensive care and cost effectiveness. CMAJ 1988; 139 (10) 943-946
  • 18 Shahroor M, Lehtonen L, Lee SK. et al; on behalf of the International Network for Evaluation of Outcomes (iNeo) of neonates. Unit-level variations in healthcare professionals' availability for preterm neonates <29 weeks' gestation: an international survey. Neonatology 2019; 116 (04) 347-355
  • 19 TCN Network. CNN Abstractors Manual v.3.5.2. Accessed August 23, 2023 at:
  • 20 Shah PS, Seidlitz W, Chan P, Yeh S, Musrap N, Lee SK. data abstractors of the Canadian Neonatal Network. Internal audit of the Canadian Neonatal Network Data Collection System. Am J Perinatol 2017; 34 (12) 1241-1249
  • 21 Manuel Des Médecins Spécialistes (no 150) 880. 2016. Accessed August 23, 2023 at:
  • 22 Beltempo M. Rapport sur l'évaluation des besoins régionauz en néonataologie au Québec. 2021: 108 . Accessed August 23, 2023 at:
  • 23 Yang M, Campbell H, Pillay T, Boyle EM, Modi N, Rivero-Arias O. Neonatal health care costs of very preterm babies in England: a retrospective analysis of a national birth cohort. BMJ Paediatr Open 2023; 7 (01) e001818
  • 24 Phibbs CS, Schmitt SK, Cooper M. et al. Birth hospitalization costs and days of care for mothers and neonates in California, 2009-2011. J Pediatr 2019; 204: 118-125.e14
  • 25 Eisenberg MJ, Filion KB, Azoulay A, Brox AC, Haider S, Pilote L. Outcomes and cost of coronary artery bypass graft surgery in the United States and Canada. Arch Intern Med 2005; 165 (13) 1506-1513
  • 26 Pozen A, Cutler DM. Medical spending differences in the United States and Canada: the role of prices, procedures, and administrative expenses. Inquiry 2010; 47 (02) 124-134
  • 27 Beltempo M, Wintermark P, Mohammad K. et al. Canadian Neonatal Network Investigators. Variations in practices and outcomes of neonates with hypoxic ischemic encephalopathy treated with therapeutic hypothermia across tertiary NICUs in Canada. J Perinatol 2022; 42 (07) 898-906
  • 28 Boverman G, Perez C, Vij S. et al. Neonatal ICU antibiotic use trends within an integrated delivery network. Antimicrob Resist Infect Control 2022; 11 (01) 21
  • 29 Braun D, Braun E, Chiu V. et al. Trends in neonatal intensive care unit utilization in a large integrated health care system. JAMA Netw Open 2020; 3 (06) e205239
  • 30 Beltempo M, Sargi E, Patel S. et al; Quebec investigators of the Canadian Neonatal Network. Neonatal intensive care unit occupancy rate and probability of discharge of very preterm infants. J Perinatol 2023; 43 (04) 490-495
  • 31 Kunz SN, Phibbs CS, Profit J. The changing landscape of perinatal regionalization. Semin Perinatol 2020; 44 (04) 151241
  • 32 Merritt TA, Pillers D, Prows SL. Early NICU discharge of very low birth weight infants: a critical review and analysis. Semin Neonatol 2003; 8 (02) 95-115
  • 33 Lee SK, Aziz K, Singhal N, Cronin CM. The Evidence-based Practice for Improving Quality method has greater impact on improvement of outcomes than dissemination of practice change guidelines and quality improvement training in neonatal intensive care units. Paediatr Child Health 2015; 20 (01) e1-e9
  • 34 Hei M, Gao X, Li Y. et al. Family integrated care for preterm infants in China: a cluster randomized controlled trial. J Pediatr 2021; 228: 36-43.e2
  • 35 O'Brien K, Bracht M, Macdonell K. et al. A pilot cohort analytic study of Family Integrated Care in a Canadian neonatal intensive care unit. BMC Pregnancy Childbirth 2013; 13 (Suppl. 01) S12
  • 36 Waddington C, van Veenendaal NR, O'Brien K, Patel N. International Steering Committee for Family Integrated Care. Family integrated care: Supporting parents as primary caregivers in the neonatal intensive care unit. Pediatr Investig 2021; 5 (02) 148-154
  • 37 Benzies KM, Aziz K, Shah V. et al; Alberta FICare Level II NICU Study Team. Effectiveness of Alberta Family Integrated Care on infant length of stay in level II neonatal intensive care units: a cluster randomized controlled trial. BMC Pediatr 2020; 20 (01) 535