Measuring hospital outcomes from a buyer's perspective

This study reports lessons learned from a project to develop a flexible, generalizable, and valid method for corporate buyers of hospital care that would permit them to use available secondary data to rate the outcomes quality of all hospitals in a local market area. As hospitalization insurance has moved from coverage that applied equally to all licensed hospitals to arrangements which selected a certain preferred hospital or hospitals and rejected others, the need to determine the quality of different hospitals (as well as what they would cost the insurer or buyer) has become apparent. The product of this project was the development and demonstration of a set of rating methods that build on the strengths available in large hospital discharge data bases, such as (but by no means limited to) that of the Pennsylvania Health Care Cost Containment Council (PHC4). These measures, or others developed using these methods, deal with uncertainty in the data--its diagnosis and treatment--in a conceptually valid and practically useful way, illustrate a process that might be used in the general development of quality measures, and provide a useful critique of some other measures.