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HCHospitalCosts

Our Methodology

HospitalCosts makes hospital pricing transparent by combining CMS price data with quality outcomes. We believe patients deserve to know what hospitals charge — and whether higher prices correlate with better care.

Data Sources

  • CMS Hospital Price Transparency Data — Our primary price source. Under the Hospital Price Transparency Rule (effective January 2021), hospitals are required to publish machine-readable files of their standard charges. CMS aggregates and publishes compliance data.
  • Medicare Inpatient Prospective Payment System (IPPS) — DRG-level payment data for every Medicare-participating hospital, including average covered charges, average total payments, and average Medicare payments per diagnosis.
  • CMS Hospital Compare / Care Compare — Quality metrics including patient satisfaction (HCAHPS), readmission rates, mortality rates, and infection rates.

How We Calculate the Value Score

Every hospital receives a Value Score on a 0-100 scale (A-F) that combines price with quality:

  • Price Competitiveness — 40% weight. Average payment for common procedures compared against the state and national median. Hospitals charging significantly above average for the same procedures score lower.
  • Quality Outcomes — 30% weight. Composite of readmission rates, mortality rates, and hospital-acquired infection rates from CMS Hospital Compare. Lower complication rates produce higher scores.
  • Patient Satisfaction — 20% weight. HCAHPS survey results measuring patient experience including communication with doctors, responsiveness of staff, and overall hospital rating.
  • Transparency Compliance — 10% weight. Whether the hospital has published compliant price transparency files as required by federal law. Non-compliant hospitals are penalized.

The key insight: an expensive hospital with excellent outcomes may score higher than a cheap hospital with poor outcomes. Value = outcomes per dollar.

Data Collection Process

We download Medicare IPPS data from data.cms.gov, cross-reference with Hospital Compare quality metrics, and normalize prices by DRG (Diagnosis Related Group) to enable apples-to-apples comparisons. Geographic cost adjustments account for regional differences in labor costs.

Update Frequency

Medicare IPPS data is published annually for the prior fiscal year. Hospital Compare quality metrics are updated quarterly. We refresh our dataset when new CMS data becomes available, typically in the fall.

Known Limitations

  • Hospital charges are not the same as what patients pay. Actual out-of-pocket costs depend on insurance plan, network status, deductible, and negotiated rates.
  • Medicare payment data only reflects Medicare patients. Privately insured patients may face different prices for the same procedures.
  • Quality metrics have inherent risk-adjustment challenges. Hospitals that treat sicker populations may appear to have worse outcomes even if their care quality is high.
  • Many hospitals remain non-compliant with price transparency rules, limiting our ability to compare actual negotiated rates.
  • The Value Score is our own composite metric, not a CMS or HHS designation.

How to Cite This Data

If you use data from HospitalCosts, please cite:

HospitalCosts. "[Hospital Name] Pricing Data." hospitalcostdata.com, 2026. Accessed [date].

Underlying data is sourced from CMS Medicare data and Hospital Compare. All sources are in the public domain.