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Measuring comparative hospital performance.

John R Griffith1, Jeffrey A Alexander, Richard C Jelinek

  • 1University of Michigan School of Public Health, Ann Arbor, USA.

Journal of Healthcare Management / American College of Healthcare Executives
|February 12, 2002
PubMed
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Healthcare organizations use balanced scorecards for strategic guidance. This study found seven of nine Medicare-derived hospital performance measures are useful for evaluating and improving hospital success.

Area of Science:

  • Healthcare Management
  • Health Services Research
  • Performance Measurement

Background:

  • Healthcare organizations increasingly adopt balanced scorecards for strategic governance.
  • This approach integrates financial, customer, internal, and learning/growth metrics.
  • Benchmarking against competitors aids in identifying mission achievement opportunities.

Purpose of the Study:

  • To evaluate a set of nine multidimensional hospital performance measures derived from Medicare reports.
  • To assess the validity, reliability, sensitivity, comparability, and independence of these measures.
  • To determine the utility of these measures for evaluating U.S. hospital performance.

Main Methods:

  • Analysis of nine hospital performance measures: cash flow, asset turnover, mortality, complications, length of inpatient stay, cost per case, occupancy, change in occupancy, and percent of revenue from outpatient care.

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  • Evaluation of content validity, reliability, sensitivity, validity of comparison, and independence.
  • Utilized Medicare reports for data derivation.

    • Main Results:

    • Seven of the nine evaluated measures were found to be potentially useful for assessing most U.S. hospitals.
    • The two occupancy measures were excluded from the useful set.
    • The selected measures reflect correctable performance differences between hospitals serving similar populations.

    Conclusions:

    • A validated set of seven multidimensional performance measures can effectively evaluate relative hospital performance.
    • These measures identify opportunities for organizational improvement and enhanced success.
    • The balanced scorecard approach, using these measures, offers valuable strategic guidance for healthcare providers.