1. Businesses providing medical services pass their costs on to patients or insurers.
2. Businesses keep track of the decision making variables impacting costs.
3. Businesses keep track of the decision making variables impacting revenue.
4. Businesses must be able to present a legitimate bill to recover costs.
5. Individuals do not keep rigorous records regard medical services as much of the cost of those services are covered by insurers.

For the above reasons the best way to compute total health costs involves making use of corporate data solely to the exclusion of patient-reported data.

Currently, national health costs are computed from data collected in a household component matched with data collected in a provider component. This is a very expensive and time consuming process involving:

1. sampling the household population
2. doing field data collection on the household sample
3. sampling the providers identified in the household data collection
4. contacting the providers to obtain health cost information for the household members
5. matching the household and provider data
6. resolving differences and imputing data as necessary
7. generation of estimates based on weighted data

The alternative being proposed involves the following:

1. sampling the provider population
2. contact the sampled providers
3. collect the following classes of data
   • total revenue for the study year
   • revenue by interesting classes (e.g. outpatient, inpatient, surgery, etc.)
   • revenue by ICD, CPT, etc.
   • who paid by interesting classes (private insurance, medicaid, medicare, individual)
   • patient demographics (gender, ethnicity, income etc.)
4. generation of estimates based on the weighted data

It will be possible to cross-check the calculated estimate with IRS reported revenue data to ensure the reliability of the estimate.

• Data points (per event):
  • gender
  • ethnicity
  • birth year and month
  • income (if available)
  • event beginning date
  • event ending date
  • event type
  • event code
  • event cost
  • event sources of payment

• Provider Responsibilities:
  • Keep electronic data
  • Code all medical events
  • Prepare an export file of the electronic data (encrypted)
  • Transmit the file to the contractor

  The export would be an export of all medical event records for the study year. So, no filtering by patient would be necessary. Also, once a provider has developed the script to export the data points, the export program would simply need to be run for each subsequent year.

• Contractor Responsibilities:
  • Prepare the provider sample frame
  • Select the provider sample
  • Maintain the provider sample file
  • Contact the provider
  • Receipt the encrypted files
  • Import the encrypted files
  • Clean and edit the data
  • Prepare aggregate file
  • Generated estimates
  • Coordinate with DHHS

Since the proposed data collection model does not involve tracking medical events at the patient sample level, the work of preparing the estimation files is much reduced.

Using the demographic info for the provider medical events, it will be possible to associate the costs for those patient classes with other national study data at the aggregate level.

Also cost estimates for classes of medical events may be computed using the ICD and CPT codes.