Home » Readers Write » Currently Reading:

Readers Write: Provider Charges: An Excellent Start

September 18, 2013 Readers Write 1 Comment

Provider Charges: An Excellent Start
By Data Nerd

9-18-2013 6-04-20 PM

Any data nerd worth his or her salt will tell you that a thorough analysis starts with vetting, mining, scrubbing, and purging compilations of data. Most of my time on any analysis project is spent understanding the context and cleansing data to the point that I can work with it confidently. So, when I came across this Medicare and Medicaid Research Review article, I wanted to bring it to the HIStalk readership’s attention as an excellent methodology for doing meaningful cost analysis across the country.

Remember earlier this summer when CMS unleashed the tip of the kraken with average DRG charges for hospitals? I say the tip of the kraken because (1) it was really a minute slice of a much larger pie, and (2) the data was sliced, diced, and visualized to a bloody pulp and although we haven’t seen a new release of data to confirm, we certainly aren’t hearing about any major price shifts in the market. As a similar release for individual providers is being considered, here is something meaningful we can do to actually understand and do something about real price variation.

Adjusting for acuity and policy factors that influence prices is essential to understanding why one provider charges more than another. Just like it was insufficient for CMS to release DRG data with average charges when patients could be treated for up to 25 diagnoses and 25 procedures in the same charge amount, it will be meaningless to release individual provider charges without the context of treatment.

Usually, I’m the first to ask for atomic “Collect Once Use Many Times” data elements (hard numbers on which to base other calculations), but in this case, relative weights really are more meaningful if you want to scout out the root of price differences. Are abnormally high salaries driving price? Supply chain inconsistencies? Medical errors? If you really want to know why one provider charges more than another, you need to hold all things constant, and the methodology outlined in this paper is an excellent start.

What do you think? Is it more meaningful to look at hard numbers (Hospital A charges $x vs Hospital B charges $y) or a relative weight holding wage and policy initiatives constant? Do relative weights obstruct meaning or provide a lens through which we can view data more clearly?

View/Print Text Only View/Print Text Only

HIStalk Featured Sponsors


Currently there is "1 comment" on this Article:

  1. Some indications that prices have increased:

    “For the year that ended in August 2013, prices increased 5.7%, compared with 4.7% the prior year.”

    While Bureau of Labor Statistic’s Producer Price Index fell for hospitals 0.1% from July to August, Hospital prices were 1.6% higher than they were a year ago.

Subscribe to Updates



Text Ads

Report News and Rumors

No title

Anonymous online form
Rumor line: 801.HIT.NEWS



Founding Sponsors


Platinum Sponsors




































































Gold Sponsors





















Reader Comments

  • FLPoggio: What this piece totally ignores is that you and the provider (roofer) dealt directly with each other. Now what if you ha...
  • AC: That's not an apt comparison. Imagine instead if while the roofer was doing his thing, another random roofer dropped by ...
  • HIT Girl: I've worked in EHR design & support for the last 14 years or so, and when I was hospitalized in I think 2007 I got m...
  • Joy Goodspeed: So funny about the physician card. I wrote my 3rd HL7 Lab and microbiology interface in my 20-year career this past yea...
  • Anonymous: Did you just compare Healthcare to roofing business ? Imagine a surgeon operating with a body cut open, should they take...

Sponsor Quick Links