Editorial Assessment of Costs in Congenital Heart

With the increasing emphasis on reducing health care costs, the number of studies in the medical literature reporting data on cost continues to rise. In the field of congenital heart surgery, previous reports have demonstrated that children with congeni-tal heart defects account for the highest resource utilization among all patients with birth defects and are in the top tier of resource use across all pediatric diseases.1,2 Cost benchmarks in the United States for a variety of common operations have been reported, and significant cost variation across hospitals has been documented, related in part to differences in compli-cation rates and postoperative length of stay.3 In this issue of theWorld Journal for Pediatric and Congenital Heart Surgery, Jantzen and colleagues report on how differences in coding and classification of operations in administrative versus clinical registry data sets can impact assessment of hospital costs in the congenital heart surgery population.4 Across studies reporting cost data, the term ‘‘cost’ ’ has been used interchangeably at times by investigators to refer to costs, payments, and charges. However, these are three dis-tinct concepts, and understanding what each of these terms refers to will aid clinicians in interpreting and understanding the findings of studies reporting cost data. The cost of a med-ical procedure refers to the sum of resources needed to carry it out. A charge is the fee assigned by the provider or hospital for the service. The payment is the reimbursement to the pro-vider/hospital for the procedure by the payer. Charges usually exceed costs as well as payments due to negotiated rates between providers and payers. These three concepts have differing uses in health economics research. Costs are often used to determine cost-outcome relationships and cost-effectiveness ratios, typically from society’s perspective. Charges are primarily useful for studies of the accounting practices of providers. Payments are of greatest interest in studies focused on the payers ’ perspective. In studies reporting costs, there are several other important issues to consider. First, it can be difficult within any hospital system to estimate ‘‘true’ ’ costs. The most common methodol-ogy involves the use of cost to charge ratios to estimate costs