Estimation of standardized hospital costs from medicare claims that reflect resource requirements for care: Impact for cohort studies linked to medicare claims

John T. Schousboe, Misti L. Paudel, Brent C. Taylor, Lih Wen Mau, Beth A. Virnig, Kristine E. Ensrud, Bryan E. Dowd

Research output: Contribution to journalArticle

25 Scopus citations

Abstract

Objective To compare cost estimates for hospital stays calculated using diagnosis-related group (DRG) weights to actual Medicare payments. Data Sources/Study Setting Medicare MedPAR files and DRG tables linked to participant data from the Study of Osteoporotic Fractures (SOF) from 1992 through 2010. Participants were women age 65 and older recruited in three metropolitan and one rural area of the United States. Study Design Costs were estimated using DRG payment weights for 1,397 hospital stays for 795 SOF participants for 1 year following a hip fracture. Medicare cost estimates included Medicare and secondary insurer payments, and copay and deductible amounts. Principal Findings The mean (SD) of inpatient DRG-based cost estimates per person-year were $16,268 ($10,058) compared with $19,937 ($15,531) for MedPAR payments. The correlation between DRG-based estimates and MedPAR payments was 0.71, and 51 percent of hospital stays were in different quintiles when costs were calculated based on DRG weights compared with MedPAR payments. Conclusions DRG-based cost estimates of hospital stays differ significantly from Medicare payments, which are adjusted by Medicare for facility and local geographic characteristics. DRG-based cost estimates may be preferable for analyses when facility and local geographic variation could bias assessment of associations between patient characteristics and costs.

Original languageEnglish (US)
Pages (from-to)929-949
Number of pages21
JournalHealth services research
Volume49
Issue number3
DOIs
StatePublished - Jun 2014

Keywords

  • DRG weights
  • Hospital costs
  • Medicare claims
  • Medicare payment
  • cohort-claims linked studies

Fingerprint Dive into the research topics of 'Estimation of standardized hospital costs from medicare claims that reflect resource requirements for care: Impact for cohort studies linked to medicare claims'. Together they form a unique fingerprint.

  • Cite this