Search tips
Search criteria 


Logo of hsresearchLink to Publisher's site
Health Serv Res. 1995 February; 29(6): 737–755.
PMCID: PMC1070041

Estimating annual charges for ambulatory care from limited utilization data.


OBJECTIVE. This study explores the types of utilization information needed to produce a reasonable estimate of annual charges for ambulatory care that could be used in the absence of charge or cost data as an aggregate utilization measure. DATA SOURCE. Charge and utilization data from the RAND Health Insurance Experiment were used. STUDY DESIGN. Services provided to enrollees in the Health Insurance Experiment at each of the six sites for a one-year period were grouped into categories according to California Relative Value Studies (CRVS) codes. Using annual charges as the dependent variable, we evaluated linear regression models for their predictive accuracy, as indicated by adjusted R2-values. Categories of services were combined on the basis of clinical meaningfulness (e.g., all provider visits into one group), and predictive accuracy of models with these groupings of services examined. We examined model validity by applying the derived models to each of the 30 remaining site-years of data from the Health Insurance Experiment. PRINCIPAL FINDINGS. We were able to explain 84 percent of the variance in charges with a model containing counts of provider visits exclusive of mental health visits, mental health provider visits, days drugs were prescribed, days radiologic procedures were performed, procedural visits subdivided according to whether they were performed by a surgical or medical provider, days laboratory and/or pathology tests were performed, days a grouping of miscellaneous tests were performed, and days supplies were purchased. When applied to the validation data, this model predicted a mean of 77 percent of the variance and mean charges 102 +/- 9 percent of actual mean charges. A model with only the first four of the listed categories explained 77 percent of the variance in charges. CONCLUSIONS. Models using only counts of several broad categories of services perform rather well in predicting annual charges for ambulatory care.

Full text

Full text is available as a scanned copy of the original print version. Get a printable copy (PDF file) of the complete article (1.7M), or click on a page image below to browse page by page. Links to PubMed are also available for Selected References.

Selected References

These references are in PubMed. This may not be the complete list of references from this article.
  • Altman SH, Socholitzky E. The cost of ambulatory care in alternative settings: a review of major research findings. Annu Rev Public Health. 1981;2:117–143. [PubMed]
  • Baldwin LM, Inui TS, Stenkamp S. The effect of coordinated, multidisciplinary ambulatory care on service use, charges, quality of care and patient satisfaction in the elderly. J Community Health. 1993 Apr;18(2):95–108. [PubMed]
  • Chapko MK, Ehreth JL, Hedrick S. Methods of determining the cost of health care in the Department of Veterans Affairs medical centers and other non-priced settings. Eval Health Prof. 1991 Sep;14(3):282–303. [PubMed]
  • Davis PB, Yee RL. The influence of practitioner and practice characteristics on service activity levels in a New Zealand general practice sample. Community Health Stud. 1989;13(2):191–199. [PubMed]
  • Eisenberg JM, Nicklin D. Use of diagnostic services by physicians in community practice. Med Care. 1981 Mar;19(3):297–309. [PubMed]
  • Epstein AM, Cumella EJ. Capitation payment: using predictors for medical utilization to adjust rates. Health Care Financ Rev. 1988 Fall;10(1):51–69. [PubMed]
  • Finkler SA. The distinction between cost and charges. Ann Intern Med. 1982 Jan;96(1):102–109. [PubMed]
  • Greenfield S, Nelson EC, Zubkoff M, Manning W, Rogers W, Kravitz RL, Keller A, Tarlov AR, Ware JE., Jr Variations in resource utilization among medical specialties and systems of care. Results from the medical outcomes study. JAMA. 1992 Mar 25;267(12):1624–1630. [PubMed]
  • Hartley RM, Charlton JR, Harris CM, Jarman B. Patterns of physicians' use of medical resources in ambulatory settings. Am J Public Health. 1987 May;77(5):565–567. [PubMed]
  • Horn SD, Buckle JM, Carver CM. Ambulatory severity index: development of an ambulatory case mix system. J Ambul Care Manage. 1988 Nov;11(4):53–62. [PubMed]
  • Kukull WA, Koepsell TD, Conrad DA, Immanuel V, Prodzinski J, Franz C. Rapid estimation of hospitalization charges from a brief medical record review. Evaluation of a multivariate prediction model. Med Care. 1986 Oct;24(10):961–966. [PubMed]
  • Lion J, Vertrees J, Malbon A, Collard A, Mowschenson P. Toward a prospective payment system for ambulatory surgery. Health Care Financ Rev. 1990 Spring;11(3):79–86. [PubMed]
  • McMenamin P. What price, Medicare? Geographic variability in Medicare physician payment levels. Inquiry. 1990 Summer;27(2):138–150. [PubMed]
  • Newhouse JP, Manning WG, Keeler EB, Sloss EM. Adjusting capitation rates using objective health measures and prior utilization. Health Care Financ Rev. 1989 Spring;10(3):41–54. [PubMed]
  • Newhouse JP, Manning WG, Morris CN, Orr LL, Duan N, Keeler EB, Leibowitz A, Marquis KH, Marquis MS, Phelps CE, et al. Some interim results from a controlled trial of cost sharing in health insurance. N Engl J Med. 1981 Dec 17;305(25):1501–1507. [PubMed]
  • Rogerson CL, Stimson DH, Simborg DW, Charles G. Classification of ambulatory care using patient-based, time-oriented indexes. Med Care. 1985 Jun;23(6):780–788. [PubMed]
  • Schneeweiss R, Hart GL. Diagnostic content of ambulatory primary care: implications for resource utilization. J Ambul Care Manage. 1988 Aug;11(3):13–22. [PubMed]
  • Schneider KC, Lichtenstein JL, Freeman JL, Newbold RC, Fetter RB, Gottlieb L, Leaf PJ, Portlock CS. Ambulatory visit groups: an outpatient classification system. J Ambul Care Manage. 1988 Aug;11(3):1–12. [PubMed]
  • Schwartz WB, Mendelson DN. Hospital cost containment in the 1980s. Hard lessons learned and prospects for the 1990s. N Engl J Med. 1991 Apr 11;324(15):1037–1042. [PubMed]
  • Tenan PM, Fillmore HH, Caress B, Kelly WP, Nelson H, Graziano D, Johnson SC. PACs: classifying ambulatory care patients and services for clinical and financial management. J Ambul Care Manage. 1988 Aug;11(3):36–53. [PubMed]
  • Weiner JP, Starfield BH, Steinwachs DM, Mumford LM. Development and application of a population-oriented measure of ambulatory care case-mix. Med Care. 1991 May;29(5):452–472. [PubMed]
  • Wouters AV. Disaggregated annual health services expenditures: their predictability and role as predictors. Health Serv Res. 1991 Jun;26(2):247–272. [PMC free article] [PubMed]
  • Young WW, Joyce DZ, Bivens GD, Lander SA, Macioce DP. Incorporating the cost of ambulatory care into case mix-based hospital reimbursement. J Ambul Care Manage. 1988 Aug;11(3):54–67. [PubMed]

Articles from Health Services Research are provided here courtesy of Health Research & Educational Trust