Research without billing data. Econometric estimation of patient-specific costs.
OBJECTIVE
This article describes a method for computing the cost of care provided to individual patients in health care systems that do not routinely generate billing data, but gather information on patient utilization and total facility costs.


METHODS
Aggregate data on cost and utilization were used to estimate how costs vary with characteristics of patients and facilities of the US Department of Veterans Affairs. A set of cost functions was estimated, taking advantage of the department-level organization of the data. Casemix measures were used to determine the costs of acute hospital and long-term care.


RESULTS
Hospitalization for medical conditions cost an average of $5,642 per US Health Care Financing Administration diagnosis-related group weight; surgical hospitalizations cost $11,836. Nursing home care cost $197.33 per day, intermediate care cost $280.66 per day, psychiatric care cost $307.33 per day, and domiciliary care cost $111.84 per day. Outpatient visits cost an average of $90.36. These estimates include the cost of physician services.


CONCLUSIONS
The econometric method presented here accounts for variation in resource use caused by casemix that is not reflected in length of stay and for the effects of medical education, research, facility size, and wage rates. Data on non-Veteran's Affairs hospital stays suggest that the method accounts for 40% of the variation in acute hospital care costs and is superior to cost estimates based on length of stay or diagnosis-related group weight alone.
Barnett
P G
PG
Health Services Research and Development Field Program, US Department of Veterans Affairs, Menlo Park, CA, USA.
D003361:Cost Allocation / Q000379:methods*; D003953:Diagnosis-Related Groups / Q000191:economics*; D017048:Health Care Costs / Q000706:statistics & numerical data; D006787:Hospitals, Veterans / Q000191:economics* / Q000706:statistics & numerical data; D006801:Humans; D016018:Least-Squares Analysis; D007902:Length of Stay / Q000191:economics; D017059:Models, Econometric; D010350:Patient Credit and Collection; D015203:Reproducibility of Results; D014481:United States