New tool aims to shed light on what hospitals spend on patient care services

The National Academy for State Health Policy has launched the Hospital Cost Tool to provide state policymakers and researchers analytical insights into how much hospitals spend on patient care services. 

The tool was created in partnership with the Rice University Baker Institute for Public Policy and Mathematica Policy Research, with support from Arnold Ventures, according to an April 5 news release from the academy. 

Five things to know:

1. The Hospital Cost Tool is based on the academy's Hospital Cost Calculator, which uses "Medicare Cost Report" data annually submitted to the federal government by hospitals. 

2. The tool identifies different cost measures for more than 4,600 hospitals nationwide from 2011 through 2019.

3. Cost measures include hospital revenue, cost to charge ratios and profitability.

4. The break-even point metric shows the amount a commercial health plan would need to reimburse a hospital to cover its expense. This accounts for a hospital's operating costs, profit or loss from public coverage programs, charity care and uninsured patient hospital costs, Medicare disallowed costs and a hospital's other income and expense.  

5. The interactive tool allows users to examine data for an individual hospital or specific health system by state or compare data in hospitals and states. 

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