<p><strong>BACKGROUND AND OBJECTIVES: </strong>Hospitals treating patients with greater diagnosis diversity may have higher fixed and overhead costs. We assessed the relationship between hospitals' diagnosis diversity and cost per hospitalization for children.</p>

<p><strong>METHODS: </strong>Retrospective analysis of 1 654 869 all-condition hospitalizations for children ages 0 to 21 years from 2816 hospitals in the Kids' Inpatient Database 2016. Mean hospital cost per hospitalization, Winsorized and log-transformed, was assessed for freestanding children's hospitals (FCHs), nonfreestanding children's hospitals (NFCHs), and nonchildren's hospitals (NCHs). Hospital diagnosis diversity index (HDDI) was calculated by using the D-measure of diversity in Shannon-Wiener entropy index from 1254 diagnosis and severity-of-illness groups distinguished with 3M Health's All Patient Refined Diagnosis Related Groups. Log-normal multivariable models were derived to regress hospital type on cost per hospitalization, adjusting for hospital-level HDDI in addition to patient-level demographic (eg, age, race and ethnicity) and clinical (eg, chronic conditions) characteristics and hospital teaching status.</p>

<p><strong>RESULTS: </strong>Admission counts were 383 789 (23.2%) in FCHs, 588 463 (35.6%) in NFCHs, and 682 617 (41.2%) in NCHs. Unadjusted mean cost per hospitalization was $10 757 (95% confidence interval [CI]: $9451 to $12 243) in FCHs, $6264 (95% CI: $5830 to $6729) in NFCHs, and $4192 (95% CI: $4121 to $4265) in NCHs. HDDI was significantly ( &lt; .001) higher in FCHs and NFCHs (median 9.2 and 6.4 times higher, respectively) than NCHs. Across all hospitals, greater HDDI was associated ( = .002) with increased cost. Adjusting for HDDI resulted in a nonsignificant ( = .1) difference in cost across hospital types.</p>

<p><strong>CONCLUSIONS: </strong>Greater diagnosis diversity was associated with increased cost per hospitalization and should be considered when assessing associated costs of inpatient care for pediatric patients.</p>