Practical approach for using Medicare data to estimate costs for cost–effectiveness analysis

Many methods have been used to measure costs for cost–effectiveness analysis in healthcare. A central challenge in cost estimation is determining the direct cost of medical goods and services from a societal perspective. This review applies the methodology for calculating Medicare reimbursements for physician services, hospital services and medications as a means of estimating healthcare costs from a US societal perspective. This review provides the tools and information needed to calculate direct medical costs related to in- and outpatient services provided by physicians and hospitals, as well as drug costs using Medicare reimbursement data. The data used in calculating Medicare reimbursements was obtained from the Centers for Medicare and Medicaid Services website. Methods for estimating costs for a particular service in a specific location using Medicare and Medicaid Services are described and demonstrated. A method based on Medicare data that uses the unadjusted geographic practice cost index and stan...