1. Introduction ICU is a specialized section of a hospital containing the equipment, medical and nursing staff, and monitoring devices necessary to provide intensive care. In Korea, There exist a controversy about the proper level of the daily ICU room charges. Hospitals consistently insist the insurance payment of the daily ICU room charges set by Korea Health Insurance Corporation(KHIC) is insufficient to reimburse the cost occurred in daily room services in ICU. So in this article, we would like to study the proper level of the the daily ICU room charges and what factors are most significant causes to change the cost level. 2. Model To calculate the ICU daily room charges, the model for costing hospital ICU services are developed specifically in relation to the characteristics of ICU activities, equipments, density of nurse servicies and resource used in ICUs. To quantify the mean daily room cost of intensive care, cost of physician services, nurse services and general hospital administrative cost not reimbursed individually by KHIC are considered. In order to calculate labor cost more accurately, activity based costing is used. After calculating the daily room charges, the regression model is built to identify key factors influencing the cost associated with ICU room charges. 3. Samples 20 % of 422 hospitals are selected and a well designed questionner containing cost and practice records are distributed. Finally 18 hospitals data are analyzed. In this data, 18 general ICU and 7 NICU data are included. The data are composed of the followings : labor cost, administrative cost, the relative value, the staff of ICU, equipments. 4. Results Generally, smaller hospitals do not have a full-time board-certified specialist or a sufficient nurses in ICU, whereas larger hospitals employ more certified intensivists and nurses per bed-so the cost of hospitals with larger bed is more higher than that of smaller hospitals. Based on the FY 2003, the average rate of cost coverage of daily room charge is from 37.8% to 64.3%. Therefore it is necessary to increase the current insurance payment to hospital about 1.55 ~2.64 times. In statistically, the cost of nurse services is a major factor to explain the ICU room charges. With regard to the nurse service in ICU, the proportion of nurses with specialized and advanced training in ICU is more higher in large medical centers. Based on the incremental cost of increasing nurse services, we can derive the proper insurance payment schedule of the daily ICU room charges. The most recommended proposal to improve the insurance payment of the ICU room charges based on the numbers of nurses per bed is as follows.( 0≤w≤1) ꀊ ꀖ ꀈ ︳︳ ︳︳ p n i ≤0.25, 300,147 0.25 < p n i ≤1.00, y i= 330,805- 122,633 *p n i 1.00