Two years ago, the University of Utah Hospitals and Clinics embarked on a Herculean data analytics task: the five-hospital system wanted to know its true service line costs. Like care delivery organizations across the industry, the academic medical center had only a rough idea of how much any given procedure cost, says Charlton Park, finance director.

Its former cost-modeling effort was a difficult undertaking. “We had allocated cost to the patient level, but it was based on cost-charge ratios,” Park says, meaning that bottom line expenses were stacked up against aggregate charge levels, or the full list-price of procedures. “At the macro level, it makes sense, because you’re allocating costs somewhere, but when you drill down to what we actually did and take into account supplies, pharmacy expenses, and lab costs at the visit level, you’re not seeing what something actually cost.” (Park will speak at Health Data Management’s upcoming Healthcare Analytics Symposium & Expo, July 15-17 in Chicago.”

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