As state policymakers seek to ensure greater affordability for consumers, NASHP’s Hospital Cost Tool (HCT) offers multiple measures to help better understand health care costs. The goal of the tool is to inform discussions between policymakers and hospitals that are essential to communities as providers of care and employers. Existing resources, like the tool’s calculator, and future materials can be found here.   

Today, NASHP released a new version of the HCT! The HCT now:

• Provides cost data for more than 4,600 hospitals from 2011 through 2023;
• Includes new aggregate information on hospitals’ prescription drug costs and charges; and
• Is easier to navigate with a new look and data dashboards.

NASHP first launched the hospital cost tool in 2020 to help answer state officials’ questions about hospitals’ costs, including charity care, profits and losses, payer mix, and more. One of the key measures within the tool is known as “breakeven,” which is how much a commercial payer needs to reimburse a hospital as a percentage of Medicare to cover that hospital’s costs.

The tool uses each individual hospital’s Medicare rate, which considers various criteria such as its location and whether it is a teaching hospital to recognize the uniqueness of hospitals. The breakeven rate is an all-in measure, accounting for that hospital’s losses/profits on other payers, including Medicaid, Medicare, and uninsured patients.  Tool users often compare breakeven to RAND’s measure of how much commercial payers reimburse hospitals (a data point included in the tool) to understand the difference between them. Ultimately, this helps inform discussions among policymakers, payers, other stakeholders and hospitals about costs and charges.

Since the HCT was first published, NASHP has regularly updated it to include the most recent publicly available data reported by hospitals through their Medicare Cost Reports. By using the Medicare Cost Report data, the tool offers state policymakers the same individualized hospital information provided to the federal government. In this version, NASHP has included 2023 hospital cost data. NASHP recognizes that there is a lag in available data but encourages users to consider HCT’s trends over time and national benchmarks that provide valuable insights on key metrics.  

This version of the HCT also includes new data on hospital prescription drug costs and charges, as requested by state officials. The HCT includes aggregate drug cost and charge information reported by hospitals in their Medicare Cost Reports. As with much of the cost data, the prescription drug information varies, but most hospitals can access drugs at a cost lower than what they charge payers, which results in revenue for the hospital.