The Question: Is my health care provider relatively low cost or expensive?
When choosing an outpatient care center, there are a handful of factors that we all consider:
- Insurance: Does this facility accept my insurance?
- Location: Is the outpatient care center located close to where I live or work?
- Quality: Will I receive high-quality care from this care center?
- Cost: Is this care center relatively low cost or are they expensive?
The historic lack of transparency in health care costs has been a source of frustration for many. In addition, there is an overwhelming amount of evidence that higher cost does not consistently equal higher quality care. In order to help our users make more informed choices about their care and derive value from their care, we have developed a tool to provide more clarity when it comes to the cost of healthcare.
The Question: Amino Outpatient Cost Ratings
Amino has developed outpatient cost ratings to help users compare the cost of different outpatient care centers. Although built on a complex set of data assets and modeling approaches, the outpatient cost ratings themselves are displayed intuitively - with a system of dollar signs ranging from one dollar sign 
indicating “low cost” to four dollar signs 
indicating “high cost.”
When you log in to your Amino account, search for outpatient care and choose a procedure, you can compare various outpatient care centers in your neighborhood using cost ratings. The cost rating you see is customized to be specific to your health insurance carrier.
Outpatient cost ratings are used to identify your Smart Match recommendations.
In your search for an outpatient care center, you may notice that the facilities that are ranked at the top of the list have a Smart Match badge. Smart Match providers must meet three criteria:
- In-network for your insurance plan
- High-quality (earning an Amino Quality Score of B or better)
- Cost-effective compared to similar in-network options
The Approach: Data and Methodology
The objective of our outpatient cost ratings is to provide you with insight into the relative cost of outpatient care centers in your geographic region. Importantly, we take your specific insurance carrier into consideration when displaying facility-level cost ratings - helping you identify the least expensive facility based on your insurance.
Step 1: Data Aggregation and Cleaning
The first step in our process is to aggregate all of the relevant data from the various locations where you can receive outpatient care - ranging from ambulatory surgical centers to hospitals. This relevant data, in part, comes in the form of claims and remits which provide insight into the cost of care for various procedures by the insurance carriers. If you see a cost rating for a local facility, that means that we have access to claims and remits submitted by that facility and we have run that data through our outpatient cost rating model.
We begin our development of cost ratings by first aggregating multiple sources of claims and remits data which provide insight into price variation by facility and insurance carrier. To improve accuracy, we then “clean” the data by identifying and removing records that may have errors or may not represent typical cost experiences.
Step 2: Calculate cost estimates per episode
In order to represent the total cost of care at an outpatient facility, we then combine individual charges into “total episode” costs. We use medical billing codes to aggregate or assign claims and remits to a single episode or outpatient procedure, such as an appendectomy. As we see in the data, the negotiated cost of an appendectomy varies by facility and insurance carrier.
Therefore, we calculate the median cost of care by episode, facility, and insurance carrier.
Step 3: Take geography into account
Cost estimate calculations are then adjusted by geography using Hospital Referral Regions - geographic units of analysis that were developed by the Dartmouth Atlas of Health Care to delineate regional health care markets in the U.S. This ensures that we account for cost variation by geography. For example, the same outpatient procedure is often more expensive in Oakland, California compared to Richmond, Indiana - we account for that.
Step 4: Transform individual data into overall facility-level cost rating
After normalizing the cost of each topic by geography, we are able to determine, by the insurance carriers, how expensive each facility is relative to nearby outpatient care centers. For ease of use, we aggregate this into an overall facility-level expensiveness rating.
Our outpatient cost rating allows you to compare the relative cost of the various local facilities that you are considering for your outpatient procedure.