How one award team makes its decisions

Hard numbers and consumers’ opinions count

The Mercury Award is just one of many honors bestowed on hospitals that display outstanding performance over the year. America’s Health Network (AHN) partnered with the Health Care Information Association (HCIA) to develop the 1998 Mercury criteria. The team measured and compared the performance of hospitals nationwide on the basis of what consumers value most in their hospital care.

While other "Top Hospitals" lists — such as "America’s Best Hospitals" published by U.S. News & World Report and the list compiled by J.D. Power — rely on the opinions of samples of phy sicians and other health care workers, AHN/ HCIA’s study is statistically driven. It looks at financial indicators, clinical information, and consumer indices. (See related article on "America’s Best Hospitals" report, p. 78.)

Elizabeth Evins, RN, JD, vice president of quality improvement services at award-winning Anne Arundel Medical Center in Baltimore, says HCIA and the award committee developed the rankings on her facility by reviewing and analyzing objective measures of her facility’s performance in the context of demographics. It also looked at other factors such as staffing and community perception. HCIA uses data from the Medicare Provider Analysis and Review Files (MedPAR) for its assessments, along with data from other sources. Lee Hilborne, MD, MPH, director of quality management services at UCLA, another award winner, says MedPAR is generally a fair representation of a facility’s outcomes because the data include the main diagnoses and major complications and comorbidities.

"That’s how they made the assessment that we have sicker patients," he says. "Our case mix index is high, hovering between 1.8 and 1.9, the average being 1. That means our patients have a higher level of comorbidity than those of other facilities." But Hilborne says he has a bit of a problem with data based on coding. "There’s an assumption that everyone codes the same, and that’s not true." (See an upcoming issue of Hospital Peer Review for an article on the accuracy of data gathered by quality professionals.)

The Mercury Award goes to top-rated hospitals in four categories: overall facility, cardiovascular services, orthopedics, and oncology. The three service lines are defined by diagnosis-related group (DRG). Twenty markets are selected, and between seven and 12 hospitals are typically recognized in a given market. Acute care hospitals that have more than 30 Medicare patients in at least two of the three service lines are included in the study. A hospital with fewer than 30 cases within a service line does not receive a rating for that service line.

"We have focus groups during which we ask consumers, What is the most important issue to you when you select a hospital?’ That’s how we came up with our three consumer indices — quality, patient care, and market reputation," says J. Tod Fetherling, the president of America’s Health Network, based in Orlando, FL. Within the quality index, the award team looks at two-year trends in morbidity and mortality, complication rates, and lengths of stay (LOS) as follows:

Two-Year Mortality Index measures actual deaths compared with expected deaths over a two-year period. Expected deaths are the number of deaths that would be predicted given the severity of each patient entering the hospital. For example, a hospital treating more severely ill patients would be expected to have more deaths. While all hospitals have mortalities, this measure can show where mortalities occurred but were not expected considering the patient’s condition. The lower the Mortality Index, the greater the survival rate of the patients in the hospital. A two-year average is used to avoid judgments based on short-term statistical anomalies.

Two-Year Complications Index measures the actual complications compared with the expected complications over a two-year period. The expected complications are the number of complications that would be predicted given the severity of each patient entering the hospital. Like mortality, a hospital treating more complex patients would be expected to incur more complications. While all hospitals have complications, this measure can show where complications occurred but were not expected considering the patient’s conditions.

Severity-Adjusted Average LOS allows for comparison of a hospital’s average inpatient LOS when compared to that of other hospitals in a market. This measure eliminates differences due to the varying severity of patients at each hospital within a market, allowing for a more meaningful comparison. A lower Severity-Adjusted LOS generally indicates more efficient consumption of hospital resources and reduced risk to patients.

Three measures are used in determining the patient service index:

Staffing Ratio compares a hospital’s staf fing level to other hospitals in the market. It measures the labor necessary to provide a patient day of hospital care and is calculated by dividing the average number of full-time equivalent employees by the number of inpatients occupying beds and outpatient visits in a hospital on any given day. Focus groups revealed that consumers perceive that more staffing is desirable because it results in better patient service. Balanced with other factors such as efficiency, this measure helps gauge the availability of staff for patient care, considering the hospital’s workload.

Efficiency compares a hospital’s costs per discharge to those of other hospitals in the market. Costs are severity-adjusted to factor out differences attributable to the varying severity of patients. In conjunction with other factors such as the level of staffing, this measure helps determine whether a hospital is getting the best results for the costs it is incurring.

Breadth of Services measures the number of services provided by each hospital — coverage of DRGs that have at least five Medicare cases. For the three service lines studied by the Mercury Award Committee — cardiology, oncology, and orthopedics — breadth of services is measured by counting the number of DRGs that have more than 10 cases.

The market reputation index assesses drawing power (how well a facility draws patients from outside its metropolitan statistical area) and market share (the percentage of patients treated by an institution).

Drawing Power measures the hospital’s ability to attract patients from outside its market. The award study calculated drawing power by dividing a hospital’s number of admissions from outside its area by the total number of admissions in its area. A high Drawing Power percentage suggests that doctors from outside the area are willing to refer patients to the hospital and that patients are willing to travel a significant distance to be treated there.

Market Share is calculated by dividing total admissions in the market by the hospital’s admissions.

Hospitals play on an even field

Data are severity-adjusted so small and large hospitals play on an even field. HCIA uses MedPAR data, Medicare’s Standard Analytical File, and Medicare Cost Reports. For each hospital, a score for each index in each of the service lines is calculated. Hospitals end up with a maximum of 12 individual scores.

"In several markets, there are hospitals that do extremely well across the board in different product line categories. Examples are Massachusetts General Hospital in Boston, Presbyterian-St. Luke’s Hospital in Denver, and UCLA," says Fetherling. "If a hospital is indexed 00.0, that does not necessarily mean it is a bad hospital." Hospitals are ranked according to statistical areas. The award team creates a midpoint, and if a hospital is ranked 100, it is the farthest away from the midpoint on the positive side. If a hospital is indexed 00.0, it is the farthest away from the midpoint on the negative side. That 00.0 hospital might compete well if it were located in another geographic area.