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