Why Does Wear The Cost Use Claims Data?
Health care costs are often confusing, even within the industry. There are what a provider charges and then there are the rates that providers negotiate with insurance companies. And that’s just the start. As a consumer, it can be extremely difficult to navigate what the cost of a procedure or appointment or a test really is and, more importantly, what you have to pay.
On the Wear the Cost website, we use claims data – the amount that health insurance companies pay for common procedures at hospitals across Maryland. Hospitals and insurance companies negotiate charges for services each year. Even with Maryland’s innovative rate setting model, there can be a lot of variation in these rates across hospitals and health care providers within hospitals. (Learn more about how Maryland hospitals are paid here.)
Based on the negotiated rates, insurance companies then calculate co-pays, deductibles, and other out-of-pocket expenses for the patient. So while the out-of-pocket costs will vary depending on which provider you use, what insurance coverage you have, and other factors, we believe claims data are more useful to the consumer than other measures of cost because they reflect what insurance companies pay.
Wear The Cost looks at the claims for the procedures listed on the site — and reports on inpatient cost at a hospital and across the state. The data listed on the site also include the costs associated with each procedure — such as diagnostic tests, appointments related to the surgery, and any rehabilitation. These services are packaged into “episodes of care,” which give consumers a more complete picture of the cost of care.
Everyone should understand the costs associated with health care. We continue to research and update the data about health care costs and add new procedures to wearthecost.org, so that everyone can make informed decisions. Together, we can work to reduce the high cost of health care.