Predicting hospital accounting costs

Two alternative methods to Medicare Cost Reports that provide information about hospital costs more promptly but less accurately are investigated. Both employ utilization data from current-year bills. The first attaches costs to utilization data using cost-charge ratios from the previous year's cost report; the second uses charges from current year's bills. The first method is the more accurate of the two, but even using it, only 40% of hospitals had predicted costs within plus or minus 5% of actual costs. The feasibility and cost of obtaining cost reports from a small, fast-track sample of hospitals should be investigated.