Table 1.

Options for Measuring Costs in Administrative Data

Term	Definition	Challenge
Charges	The amount listed on the bill.	Without adjustment, bears little resemblance to payments or costs.4
Reimbursements/payments	The amount paid or reimbursed for services rendered	Payments are based on a pre-defined set of insured benefits. May not reflect the resources used for individual patients.
Activity-based cost	Cost estimates based on local prices and activities.	Often not available to researchers; embedded accounting rules are often not explicit
Opportunity cost	Benefits foregone because the resources were not used in the next best alternative	Not observed in any database