HERC: Guidebooks
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HERC guidebooks are grouped by the following categories:

HERC Average Cost Datasets

HERC's Average Cost Datasets for VA Inpatient Care

Wagner TH, Chow A, Su P, Barnett PG
Health Economics Resource Center, June 2023 | View »
  • The U.S. Department of Veterans Affairs (VA) provides health care to Veterans at more than 120 inpatient facilities. In 1999, the VA funded the Health Economics Resource Center (HERC) to adapt existing cost methodologies and to expand methods to estimate costs of health care encounters. This guidebook describes HERC's method for estimating the cost of VA inpatient stays back to fiscal year 1998. It discusses methods in building the dataset, assumptions underlying the dataset, and how to use the dataset.

HERC's Outpatient Average Cost Dataset for VA Care

Phibbs CS, Scott WJ, Flores NE, Barnett PG
Health Economics Resource Center, May 2023 | Intranet only
  • This document describes the Health Economics Resource Center (HERC) Outpatient Cost files. HERC produces a companion document for the HERC Inpatient Cost files available on the HERC web site. The HERC Outpatient Cost files contain our estimate of the cost for each outpatient encounter reported in national VA databases since October 1, 1997.1 The HERC files can be linked to VA utilization databases to find patient demographics, location of care, services provided, and patient diagnosis. These estimates are designed to be useful to researchers and VA managers who need to estimate the relative value of service units delivered by VA providers and programs. The HERC Outpatient Average Cost files include three different estimates of the resources used in each VA outpatient encounter.

Guidebook to the HERC Person-Level Cost Datasets FY1998-2014

Chen S, Shane A
Health Economics Resource Center, September 2014 | Intranet only
  • This guidebook provides information on how the HERC person-level cost dataset is created, how to detail the categories of inpatient and outpatient care and cost, and how to include pharmacy cost since 1999. A description of how to present HERC average costs at both local and national levels is also included.

    Last updated: September 2014. HERC person-level cost data was discontinued after FY2014. No updates to this guidebook are planned. 

Managerial Cost Accounting (MCA) System Data
MCA Guidebooks Disclaimer

VA's Managerial Cost Accounting (MCA) System (formerly Decision Support System or DSS) cost data and NDEs are no longer available on Austin as SAS datasets. They now reside within CDW as SQL tables. These guidebooks pertain to the SAS datasets and may no longer be accurate in the face of the migration to SQL tables in CDW. For more information, please contact HERC for the MCAO Intranet URL.

HERC's MCA Discharge Dataset with Subtotals for Inpatient Categories of Care

Wagner T, Lo J
Health Economics Resource Center, September 2018 | View »
  • This guidebook describes how we prepared the HERC Discharge dataset with cost and length of stay (LOS) subtotals for each inpatient category of care. Chapter 2 describes the methods we used to merge the DISCH and TRT. In our comparison of the two files, we found that the vast majority of the records had equivalent total costs and lengths of stay. There were few cases where this was not true. Chapter 3 describes our methods for dealing with the small number of records with cost and length of stay differences between the DISCH and TRT, while Chapter 4 discusses important information regarding the use of the new Discharge dataset.

Research Guide to the Managerial Cost Accounting National Cost Extracts

Phibbs CS, Barnett PG, Fan A
Health Economics Resource Center, February 2015 | Intranet only
  • The U. S. Department of Veterans Affairs (VA) uses the Managerial Cost Accounting System (MCA) (formerly Decision Support System (DSS)) for fiscal management and to determine the cost of patient care. National Data Extracts (NDEs) have been created to facilitate access to workload and cost information. These extracts report costs of inpatient and outpatient encounters provided by VA.

    This document reports on the four NDEs that the MCA Office refers to as the core NDEs: the inpatient discharge (DISCH), inpatient treating specialty (TRT), observation treating specialty (OBT), and outpatient (OPAT) files. The goal of this handbook is to describe the contents of the MCA core NDEs and to provide instructions on how they may be used. Unlike a typical data dictionary or technical manual, this handbook provides task-oriented directions for using the core MCA NDE’s. It focuses on five major topics: 1) Accessing NDE data files; 2) The types of cost data that are included; 3) Characterization of records, variables, and facilities included in the NDEs; 4) Linking cost information in the MCA databases to clinical information in the VA and utilization databases; 5) Outliers.

Guidebook for the DSS Intermediate Product Department Files

Yoon J, Gage M, Barnett PB
Health Economics Resource Center, September 2011 | Download »
  • This guidebook provides information on using the Decision Support System (DSS) National Intermediate Product Department Extract files for research. Separate files for inpatient (T-IPD) and outpatient (O-IPD) care were created and released by DSS for each fiscal year beginning in 2005 and retrospectively created for fiscal years 2003 and 2004. These files were released to provide more detailed cost information for specific types of care. Previously, DSS National Data Extracts reported costs for six broad categories medicine/other, laboratory, pharmacy, radiology, nursing, and surgery. These cost sub-totals were dropped from the NDE files while new IPD files were created with a richer set of cost detail. The IPD files report costs for more than 600 product departments representing type of care and work performed during a medical encounter.

    Last updated: September 2011. No updates to this guidebook are planned. 

Station-Level Cost Data

Medicare Wage Index for VA Facilities

Wagner TH
Health Economics Resource Center, March 2022 | View »
  • Medical facilities produce health care by combining labor and capital (e.g., supplies, equipment, buildings). Labor prices vary considerably across the nation; certain markets, such as San Francisco and Boston, are known for having high labor costs. Researchers may need to adjust their cost analyses for these wage differentials. The best known method involves using the Medicare wage index. HERC has combined data from the Centers for Medicare and Medicaid Services (CMS) and the VHA Support Services Center (VSSC) to create a Medicare wage index for VA facilities.

HERC's Station Level Cost Dataset FY2000 - FY2010

Wagner TH
Health Economics Resource Center, July 2011 | Download »
  • The U.S. Department of Veterans Affairs (VA) provides health care to more than 5 million veterans each year. DSS datasets have detailed cost information at many levels, but one dataset not created by DSS is a station level dataset with subtotal for types of care. This guidebook describes HERC’s method for estimating the cost of VA inpatient and outpatient services. We classified inpatient care into twelve service categories based on the treating specialty. These services include medicine and surgery, rehabilitation, blind rehabilitation, spinal cord injury, specialized psychiatric, substance abuse treatment, intermediate medicine, domiciliary, and psychosocial residential rehabilitation stays (psychiatric and substance use). For these twelve services, we tabulated days of care and costs. We classified outpatient care into thirteen service categories based on the clinic stop: medicine, dialysis, ancillary, rehab, diagnostics, pharmacy, prosthetics, surgery, psychiatry, substance use, dental, adult day, and home care. For these outpatient services we tabulated visits and costs. The result is a dataset with twenty-five service categories, costs and utilization counts at each VA medical center.

    Last updated: July 2011. No updates to this guidebook are planned. 

Researchers' Guide to the Account Level Budgeter (ALB): Fiscal Year 2009 Update

Chow A, Roumiantseva D, Wagner TH, Scott JY, Harden CM, Barnett PG
Health Economics Resource Center, October 2010 | Intranet only
  • This guide provides information on how the Decision Support System (DSS) Account Level Budgeter (ALB) National Data Extract (NDE) is created, how to access the ALB, and describes variables in the ALB. Examples of how the ALB may be used in research are also discussed.

    Last updated: October 2010. No updates to this guidebook are planned. 

Researchers' Guide to the DSS Monthly Program Cost Report (MPCR)

Wagner TH, Chow A, Yu W, Barnett PG
Health Economics Resource Center, January 2006 | Download »
  • This guidebook describes the DSS Monthly Product Cost Report. We describe the purpose for the MPCR and alternative DSS datasets that might be more suitable for research.

    Last updated: January 2006. No updates to this guidebook are planned. 

Resources for Direct Measurement of Intervention Cost

Researcher's Guide to Estimating VHA Labor Costs

Barnett PG, Dally SK, Scott W, Gehlert EH
Health Economics Resource Center, January 2021 | Intranet only
  • VHA labor cost estimates are needed for economic evaluations of innovative services. To find the cost of labor, an analyst must determine the time spent in delivering the intervention by each type of staff that is involved using direct measurement, or micro-costing. There are two sources of labor costs of the VHA: the Financial Management System (FMS) and the Decision Support System Account Level Budgeter (ALB). Although both sources provide information on the hours worked and labor costs, FMS and DSS ALB give slightly different estimates of labor costs. HERC has created a dataset that provides hourly labor cost estimates by job category from both sources for every year since the 2000 Federal fiscal year. This guide provides information on both data sources, methods used to create the dataset, and recommendations about using each dataset.

Research Guide to the VA Financial Management System (FMS)

Smith MW, Barnett PG
Health Economics Resource Center, March 2010 | Intranet only
  • The purpose of this guidebook is to introduce researchers to datasets drawn from the Financial Management System (FMS) of the U.S. Department of Veterans Affairs (VA). It lists the contents of FMS datasets and contrasts FMS with other VA costs datasets, explains the meanings of variables in FMS files, describes how to access the data, offers tips on using the data to estimate wages, and provides a bibliography of published studies that used FMS data.

    Last updated: March 2010. No updates to this guidebook are planned. 

Microcost Methods for Determining VA Healthcare Costs

Smith MW, Barnett PG, Phibbs CS, Wagner TH
Health Economics Resource Center, February 2010 | Download »
  • The purpose of this guidebook is to introduce researchers to microcosting, a set of related methods for determining the cost of healthcare. It explains microcost methods and provides guidance on using them with data produced by the Department of Veterans Affairs (VA), but many of the principles that are described apply to other healthcare systems. Researchers new to the VA or new to cost analyses often have many questions about institutional matters, and it is these readers we have kept in mind when writing the handbook. We hope it will be a useful reference for more experienced researchers as well. To that end, it will be updated as needed to stay abreast of development in VA data systems and advances in research.

    The guidebook is organized as follows. Chapter 2 provides an overview of datasets that may be used to determine costs of VA care. Chapter 3 briefly describes the Cost Distribution Report (CDR) and its successor, the Monthly Program Cost Report. Chapters 4 through 7 describe three alternative methods of microcosting: direct observation and measurement (Chapter 4), creation of pseudo-bills (Chapters 5-6), and statistical cost functions (Chapter 7). Chapter 8 covers two topics that have received little attention heretofore: malpractice payments and the cost of capital.

Provider Data

Guidebook for Research Use of PAID Data

Shane AC, Phibbs CS
Health Economics Resource Center, August 2013 | Intranet only
  • Researchers at the VA’s Health Economics Resource Center (HERC) created this guidebook to assist other researchers in their use of the PAID data. HERC researchers who used the PAID data for a nurse staffing study found limited information about the sources of the data and how to interpret the variables. This guidebook offers all of the information that the researchers learned about the History and Master Files while conducting multiple analyses of the data.

Guide to VA Data on Health Care Providers

Roumiantseva D, Sinnott PL, Barnett PG
Health Economics Resource Center, July 2013 | Intranet only
  • A diverse set of providers, including physicians, nurses, mental health professionals and others, care for patients in the Veterans Health Administration (VHA). Health services researchers who use cost and utilization data to study efficiency and outcomes are often interested in identifying the provider of a service. This information is needed to evaluate the effect of interventions directed at providers. It is also needed for studies that evaluate the relationship between provider characteristics and the efficiency or quality of care. It can be useful for any research on patient outcomes, allowing the analyst to control for the correlation between patients who are seen by the same provider. This guidebook provides an overview of provider-related variables in the Department of Veterans Affairs (VA) datasets, and the relationships between them.

    Last updated: July 2013. For information on identifying providers in VA administrative data, see our new webpage at http://www.herc.research.va.gov/include/page.asp?id=providers-va-admin-data

Other Data Sources

HERC's Guide to the Nosos Risk Adjustment Score

Wagner T, Moran E, Shen ML, Gehlert E
Health Economics Resource Center, May 2024 | View »
  • This document provides an overview of the VA Nosos risk score, based on the Centers for Medicare and Medicaid (CMS) Hierarchical Condition Categories (HCC) risk adjustment model (Note: Nosos is the Greek word for 'chronic disease').

Fee Basis Data: A Guide for Researchers

Gidwani R, Hong J, Murrell S
Health Economics Resource Center, November 2015 | View »
  • The Fee Basis Data Guidebook is intended to help researchers understand and use the National Fee Basis files, which come in both SQL and SAS formats. This update describes for the first time the SQL Fee Basis files. The guidebook provides information about the characteristics of the data, such as contents and missingness, in both SAS and SQL. It compares the data available in the two formats, highlights important variables, and discusses certain data limitations.

    As of April 2019, this guidebook is no longer being updated. For current information on Community Care data, please visit the page VA Community Care Data.

Preference Measurement in Economic Analysis

Sinnott PL, Joyce VR, Barnett PG
Health Economics Resource Center, March 2007 | Download »
  • This guide includes an overview of the concepts of preference measurement and quality-adjusted life years, a description of the most common techniques used for measuring preferences in economic evaluation, a summary of experience measuring preferences in the VA Cooperative Studies Program (CSP) (Spitzer, Dobson et al. 1981) clinical trials, and recommended criteria by which to select both the methods and measures to use in cost-effectiveness analysis (CEA). In Appendix 1 we have included sample questions from each of the multi-attribute health status classification systems included in the discussion of indirect methods. In Appendices 2 and 3, we have included links and references to various resources highlighted in the document.

    Last updated: March 2007. No updates to this guidebook are planned.