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Home > Studies > 1998 national study > Methodology > Measures

100 Top Hospitals:
Benchmarks for Success — 1998

Performance measures and definitions

MEASURE

CALCULATION

COMMENT

FAVORABLE
VALUE

Risk-adjusted mortality index The number of actual deaths divided by the number expected, given the risk of death for each patient. Uses HCIA's risk-adjusted mortality model, accounting for differences in hospital characteristics (size, geographic location, teaching status, and community setting) and in type and severity of cases treated. Post-discharge deaths are excluded. Below the median

 

Risk-adjusted complications index The number of cases with complications divided by the number expected, given the risk of complication for each patient. Uses HCIA's risk-adjusted complications model, accounting for differences in hospital characteristics (size, geographic location, teaching status, and community setting) and in type and severity of cases treated. The model includes complication indices for six patient groups: major surgery, minor surgery, cardiology, endoscopy, medical patients, and all patients. Pediatrics and obstetrics are excluded. Below the median
Severity-adjusted average length of stay The average patient length of stay, adjusted for differences in severity of illness. Adjustments are made using the Refined DRG methodology. Patients are assigned a number corresponding to the relative severity of their condition. The numbers are summed to produce an adjusted discharge value. Below the median
Expense per adjusted discharge, case mix- and wage- adjusted Total operating expenses divided by the number of adjusted discharges, case mix- and wage-adjusted. Measures the hospital's average cost of delivering care on a per-unit basis. Discharges are adjusted by multiplying the number of acute care discharges by a factor that inflates it to include inpatient acute care, inpatient non-acute care, and outpatient discharges. Case mix adjustments account for differences in complexity, according to the Medicare case mix. Wage adjustments account for geographic differences in cost of living, according to the Health Care Financing Administration (HCFA) wage index. Below the median
Profitability (cash flow margin) The sum of net income, depreciation, and interest expense divided by the sum of net patient revenue and total other income. A measure of overall hospital profitability, expressed as a percentage. Above the median
Proportion of outpatient revenue The proportion of outpatient revenue. Proportion of outpatient revenue is the fraction of total patient revenue derived from outpatient sources in 1997. Above the median
Index of total facility occupancy The sum of two rankings: current year total occupancy, and growth in occupancy. Current year total facility occupancy is the ratio of a hospital’s average daily census (the number of inpatients occupying beds in a hospital on any given day) to the average number of beds in service, expressed as a percentage. Growth in total facility occupancy is the average of the percent change over two time periods: 1995 to 1996 and 1996 to 1997. Above the median
Productivity (total asset turnover ratio) Net patient revenue divided by total assets. Measures the amount of productivity a hospital achieves in relation to the assets it controls. Above the median

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