Inpatient, Outpatient, and 

Pharmacy Costs from DSS 

Jean Yoon

October 12, 2011
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Outline 

 HERC Average Cost vs DSS cost data 

 How DSS gets costs 

 DSS National Data Extracts

– Inpatient data

– Outpatient data

– Intermediate product department data

– Pharmacy data

 Using DSS data for research 

– HERC-created files (Station Level, Discharge with Subtotals)

– Comparison with Medicare costs

– Advantages of using DSS

– Merging with clinical records, outliers, other issues
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Overview of VA Cost Data Sets

 Two possible sources:

– DSS cost

 Activity-based, managerial cost accounting system

 Contains complete cost information for all of VHA, 

VBA and NCA

 Implemented on a local level

– HERC average cost

 Assigns costs for each VA encounter based on 

diagnoses, length of stay, procedures

 Directly comparable to Medicare and other payers
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Poll 

White board question
HERC Average Costs Datasets
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HERC Average Cost Datasets

 HERC method of distributing costs to hospital stays 

and outpatient visits 

 Created to merge easily with clinical files

 Acute medical surgical stays 

– Estimate of what stay would have cost in a Medicare 

hospital, based on a regression model 

 Other inpatient care

– Length of stay

 Outpatient care

– Hypothetical Medicare payment based on procedure codes 

assigned to visit
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 Directly comparable to non-VA providers 

(Medicare) 

 Costs identical for all encounters with 

same characteristics 

 HERC has file with average cost for each 

person in each fiscal year 

HERC Average Cost Datasets Con’t
DSS National Data Extracts
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How Does DSS Provide 

VHA Cost Data? 

VISTA workload, 

clinical, & financial 

data (FMS, PAID)

National Data Extracts of DSS

Time allocation 

Relative values

DSS VISN Level Production Databases
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DSS Determines Costs of Products

 Cost assigned to cost center

– Staff labor mapping and financial data 

 Cost of overhead distributed to direct care 

departments 

 Products in each department tabulated

 Relative values assigned to products

 Unit cost of each product determined
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DSS Assigns Cost to Encounters

= Total cost 

of 

encounter

∑Intermediate X IP Cost 

Product (IP) 
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DSS National Data Extracts for VHA

 Inpatient (Treating Specialty, Discharge)

 Outpatient Encounter

 Intermediate Product Department

 Pharmacy

 Account Level Budget Cost Center

 Clinical
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DSS Cost File: 

Inpatient Discharge File

 Care of patients discharged in fiscal year

 One record per discharge 

 Includes cost incurred in prior fiscal years

 May exclude stays that began before DSS 

implementation at each facility
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DSS Data Only in Discharge File

 Discharge day 

 Total days of stay 

 Discharge bedsection 
Discharge example

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Patient ADMITDAY DISDAY FP LOS DBEDSECT TOT

A 24SEP05 01OCT05 1 7 Gen Acute 

Med

9824.24

A 31OCT05 11NOV05 2 11 Gen Acute 

Med

4673.01

A 04AUG06 21SEP06 12 48 Rehab 81868.77
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DSS Cost File: 

Inpatient Treating Specialty File

 Treating specialty

 One record per treating specialty per month 

– More than one record in a month if more 

than one treating specialty in a month

– All care provided during fiscal year

– Include stays not yet over
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DSS Data Only in Treating Specialty 

File

 Treating specialty

 Census indicator

 Date of entry and exit from treating specialty

– No discharge date

 Treating specialty length of stay

– No total length of stay
DSS Treating Specialty File Example

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Patient TRTIN TRTOUT TR 

SP

TR SP 

LOS 

FP TCST_TOT 

A 01OCT05 01OCT05 15 1 1 350.01 

A 31OCT05 11NOV05 15 1 1 544.24 

A 31OCT05 11NOV05 15 10 2 23787.22 
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DSS Data in Both Inpatient Files

 Admit day

 Admitting DRG

 Principal diagnosis 

 Admitting diagnosis 
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Comparison of Record Structure 

ADMITDAY 3/15/04

TRTIN 3/22/04

TRTOUT 4/12/04

FP 6

ADMITDAY 3/15/04

TRTIN 3/22/04

TRTOUT 4/12/04

FP 7

March

Rehabilitation

April

Rehabilitation

ADMITDAY 3/15/04 DISDAY 4/12/04

March

General Medicine

ADMITDAY 3/15/04

TRTIN 3/15/04

TRTOUT 3/22/04

FP 6

Treating Specialty- 3 records

Discharge– 1 record in FY 04
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Comparison of Record Structure

(Overlapping fiscal year)

September

General Medicine

October

General Medicine

ADMITDAY 9/22/03 DISDAY 10/8/03

ADMITDAY 9/22/03

TRTIN 9/22/03

TRTOUT 9/30/03

FP 12 CENSUS=Y

In FY03 File

ADMITDAY 9/22/03

TRTIN 9/22/03

TRTOUT 10/8/03

FP 1 CENSUS=N

In FY04 File

Treating Specialty- 2 records

Discharge– 1 record in FY 04 file
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DSS Cost Files: Outpatient Files

 One record per patient per day per clinic 

stop

– NPCD events file allows more than 1 record 

per clinic stop per day

– DSS includes care not in NPCD events file, 

e.g., prosthetics

 Primary DX and CPT codes 
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DSS Data Only in Outpatient Files

 Date of encounter

 DSS identifier (clinic stop)

– DSS uses “pseudo stop” code for 

prosthetics, pharmacy, etc.

 Flag variables identifying data source

– NPCD, pharmacy, prosthetics, Vast CBOC, 

etc
DSS OPAT Example

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Patient VIZDAY CLSTOP OCST_TOT

A 20051018 411 34.10

A 20051018 108 24.33

A 20051018 306 25.20
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DSS Cost Variables in All Files

 Fixed direct

 Fixed indirect

 Variable

 Total

 Variable labor category 4 & 5
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Additional Cost Variables in 

Inpatient Files

 Separate costs for lab, nursing, pharmacy, 

radiology, surgery, all other 

– Variable, fixed direct, fixed indirect, supply 

(where applicable)
DSS IPD Files

 IPD inpatient and outpatient files released 2005

 Multiple product departments per encounter

 Cost by type per product department 

 Inpatient: monthly record per patient per inpatient 

product department

 Outpatient: one record per patient per outpatient 

product department

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IPD-TRT Example

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Patient TRTIN TRTOUT IPD_NUM IPD_TOT

A 06-07-22 06-07-27 psychiatry MD bedday 471.11

A 06-07-22 06-07-27 psychology & 

neuropsychology lab

1.08

A 06-07-22 06-07-27 occupational therapy 1985.01
DSS Pharmacy 

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 In the DSS Pharmacy Extract file

– For outpatient records, there is one record

 Per prescription or supply per person per day

– For inpatient records, there is one record 

 Per person per day 

 DSS sometimes groups two prescriptions into one 

record if they are for the same NDC and the same 

person on the same day
DSS Pharmacy Variables

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 Medication: drug name, NDC, formulary indicators

 Dispensing: fill date, quantity dispensed, days 

supplied 

 Cost: VA cost including direct labor, indirect costs of 

the pharmacy department, and supplies 

 Patient: SCRSSN, date of birth, gender, age 

 Ordering provider: provider ID, provider treating 

specialty 

 Note: Clinical information on related visits/stays can 

be linked to Rx data using SCRSSN. 
Pharmacy Copayments

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 VA charges some copayments.

– Depends on income, disability percentage 

– Rules & eligibility levels change year to year

– Rules available on VA internet

 DSS does not show copayments; they show VA’s 

expense.

 MCCR files could show reimbursement from private 

insurance, if collected
Using DSS for Research
HERC-Created DSS Files

DSS Station Level Cost Data Set beginning 2002

 Annual costs and total utilization (inpatient days or outpatient visits) 

in HERC-designated service categories (13 inpatient categories, 12 

outpatient categories)

 One record per service per station (STA3N) per fiscal year

HERC DSS Discharge Dataset with Subtotals 

 DSS Discharge NDE only discharge bed section but not other 

treating specialties 

 HERC DISCH file beginning FY 2007 functionally identical to the 

DSS DISCH NDE with additional fields for cost and length of stay 

subtotals for each inpatient category of care, e.g., acute medicine, 

psychiatry, nursing home, etc. 

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Comparing DSS to Medicare Costs

Cost Type DSS Medicare

Physician Services Included in hospital 

costs(VL-4 & VL-5) 

Excluded from 

hospital costs

Indirect costs Includes VA central 

office and national 

operation costs plus 

hospital admin costs

Only hospital admin 

costs

Capital costs Financing costs 

excluded 

Financing costs 

included 
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Advantages of Using DSS 

 DSS costs estimate reflect facility differences in 

productivity, efficiencies, economies of scale, etc

 DSS has pharmacy data

 Non-VA provided purchase care is about 10% of care 

– Examples: community hospitals, community nursing 

homes, private outpatient services 

 DSS is an activity-based method and is the official 

cost managerial accounting system for the entire 

Department of VA
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Costing Methods

More precise Less precise

Inpatient

HERC

Med/Surg

Outpatient

HERC 

AC Costs

Inpt. Rehab, HERC 

MH, LTC

DSS
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PTF Bed section files Treating specialty

more difficult

PTF Main files Discharge

easy 

NPCD Outpatient Files Outpatient

moderate 

VA Utilization Data DSS Cost Data

Ease of Merging DSS Cost Files with 

Utilization Files
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Cost Outliers in DSS

 Users should look for cost estimates that are 

unexpectedly high given characteristics of care

 Mismatch of cost and utilization can result in 

unit costs that are very high cost, or negative

 DSS quality assurance efforts

– Audit that costs in DSS agree with general ledger 

– Extreme high outliers are identified and corrected 

when DSS national data extracts (NDE) are built
DSS Resources
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DSS Data Access

 See HERC guide on DSS

 DSS Program Office Web Site (VA Intranet DSS web site)

 SAS files available at Austin Center (AITC) for VA 

employees

 DSS Reports Web Site (VA Intranet VSSC web site)

– Summaries of DSS data

– Documentation of DSS and new DSS datasets
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HERC DSS Guidebooks

 Research Guide to Decision Support System National Cost 

Extracts (updated 2008) 

 HERC's Station Level Cost Dataset FY2000 - FY2007

 HERC's DSS Discharge Dataset with Subtotals for 

Inpatient Categories of Care, Fiscal Year 2007

 Research Guide to the DSS Intermediate Product 

Department Files

http://www.herc.research.va.gov/publications/guidebooks.asp
DSS Pharmacy Resources

 DSS Pharmacy guidebook

– VIReC research user guide: VHA pharmacy prescription data.

http://www.virec.research.va.gov/References/RUG/RUG-Pharmacy2nd-Ed-er.pdf

 HERC Technical Report: 

– Comparing Outpatient Cost Data in the DSS National Pharmacy 

Extract and the Pharmacy Benefits Management V3.0 Database 

http://www.herc.research.va.gov/data/dss.asp

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HERC Average Cost Guidebooks

 HERC’s Average Cost Datasets for VA 

Inpatient Care 1998 - 2008 

 HERC's outpatient average cost dataset for 

VA care: fiscal year 2008 update 

 HERC's Annual Person Level Cost Dataset 

User Guide: Fiscal Years 1998-2008 

http://www.herc.research.va.gov/publications/guidebooks.asp
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Next Classes

October 26, 2011

Sources of VA Care Costs and Providers

HERC staff

November 09, 2011

Estimating Cost for Non-VA Utilization in a 

Research Study

Todd Wagner