Profiling resource use: do different outcomes affect assessments of provider efficiency?

To examine whether 2 outcome measures result in different assessments of efficiency across 22 service networks within the Department of Veterans Affairs (VA).

A retrospective analysis using VA inpatient and outpatient administrative databases.

A 60% random sample of veterans who used healthcare services during fiscal year 1997 was split into a 40% sample (n = 1,046,803) for development and a 20% sample (n = 524,461) for validation. Weighted concurrent case-mix models using adjusted clinical groups were developed to explain variation in 2 outcomes: "days of care"--the sum of a patient's inpatient and outpatient annual visit days, and "average accounting costs"--the sum of the average service costs multiplied by the units of service for each patient. Two profiling indicators were calculated for each outcome: an unadjusted efficiency index and an adjusted efficiency index. These indices were compared to examine network efficiency.

Although about half the networks were identified as "efficient" before and after case-mix adjustment, assessments of individual network efficiency were affected by the adjustment. The 2 outcomes differed on which networks were efficient. For example, 4 networks that appeared as efficient based on days of care appeared as inefficient based on average costs.

Assessments of provider efficiency across the 22 networks depended on the outcome measure used. Knowledge about the extent to which assessments of provider efficiency depend on the outcome measure used is an important step toward improved and more equitable comparisons across providers.