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No Link Found Between Hospital’s Financial and Patient Care Success

October 11th, 2016

DALLAS – Financial performance might be the bottom line for hospital administrators, but it doesn’t always say much about how successfully patients are treated.

That’s according to a new study in the Journal of Hospital Medicine, which also found that loss of revenue was not the inevitable result of patient outcome improvement on several commonly assessed criteria.

For the study, University of Texas Southwestern researchers compared financial performance from 279 hospitals to their 30-day mortality and readmission rates for acute myocardial infarction (AMI), congestive heart failure (CHF), and pneumonia (PNA). No consistent relationship between measures of financial performance in 2008 and publicly reported outcomes were found from 2008 to 2011 for AMI and PNA, although hospital financial performance was associated with a modest 0.26% increase in CHF mortality rates. In addition, no significant association was identified for outcomes from 2008 to 2011 and subsequent financial performance in 2012.

"This finding suggests hospitals that are financially well off do not necessarily do better on these publicly reported outcomes than hospitals with worse financial performance," explained study lead author Oanh Nguyen, MD, assistant professor of Internal Medicine and Clinical Sciences at UT Southwestern.

At the same time, "We also found that improved performance on these outcome metrics was not associated with a subsequent loss in revenue, which has been a major concern in policy circles," said senior author Anil Makam, MD, assistant professor of Internal Medicine and Clinical Sciences.

The authors suggest that public reporting of outcomes might have had less than the intended impact in pushing hospitals to invest in quality improvements, but note that financial incentives in addition to public reporting, such as penalties for excessive readmissions, could help motivate hospitals with good financial performance to further improve outcomes.

For the study, researchers collected audited hospital financial data from the Office of Statewide Health Planning and Development in California in 2008 and 2012, and linked this data to 30-day mortality and readmission data from the CMS Hospital Compare website. Financial performance was based on net revenue from operations, operating margin, and total margin.

“Robust financial performance is not associated with improved publicly reported outcomes for AMI, CHF, and PNA,” study authors concluded. “Financial incentives in addition to public reporting, such as readmissions penalties, may help motivate hospitals with robust financial performance to further improve publicly reported outcomes. Reassuringly, improved mortality and readmission rates do not necessarily lead to loss of revenue.”


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