Background: The Healthcare Cost and Utilization Project (HCUP), the nation’s most complete source of all-payer hospital care data, supports analyses at the national, regional, state and community levels. However, national HCUP data are often used in inappropriate ways in studies of state-specific issues.

Objective: To describe the opportunities and challenges of using HCUP data to conduct state health policy research and to provide empirical examples of what can go wrong when using the national HCUP data inappropriately.

Research design: Comparison of results from state-level analyses using national HCUP data and the state-specific HCUP data recommended by the Agency for Healthcare Research and Quality (AHRQ). Analyses included trends in state-specific rates of cesarean delivery and a difference-in-differences analysis of Connecticut’s Medicaid expansion.

Subjects: Hospital discharges from the 2004 to 2011 HCUP Nationwide Inpatient Samples (NIS) and State Inpatient Databases (SID).

Measures: Cesarean delivery rates, discharges per capita, and discharges by the payer.

Results: State-level estimates derived from the NIS are volatile and often provide misleading policy conclusions relative to estimates from the SID.

Conclusions: The NIS should not be used for state-level research. AHRQ provides resources to assist analysts with state-specific studies using SID files.

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