California agency outlines approach to measuring hospital outpatient spending, favors HPD claims as primary source

OCA staff presented a provisional method for measuring hospital outpatient spending that pairs hospital financial reports with claims-level data from the Healthcare Payments Database (HPD). Deputy Director Vishal Pagani and staff said the goal is a per‑unit outpatient revenue metric comparable to the office’s inpatient measure and suitable for inclusion in statewide spending targets.

Why it matters: the office is building the outpatient component of the statewide spending target framework. Outpatient care accounts for roughly 40 percent of hospital spending and has been harder to measure because visits and procedures are more varied and the public data available to date are less granular than for inpatient care.

The office’s approach and next steps

OCA will use hospitals’ annual financial disclosure reports (hospital financial data) for total outpatient net patient revenue and visit counts, and use HPD claims and encounter records to estimate an “outpatient intensity adjustment” (OIA). The OIA converts heterogeneous outpatient visits into adjusted outpatient visits; dividing outpatient net patient revenue by adjusted visits produces an outpatient NPR (net patient revenue) per adjusted visit, a per‑unit…