The 100 Top study offers the health care industry a direction for positive change by identifying hospitals that provide high-quality care, operate efficiently, and produce superior financial results.

This year’s 100 Top Hospitals study reveals noteworthy insights based on region and facility size:

1. Managed care cutting into regional outpatient revenue. Contrary to general expectations, in the West, 1997 median lengths of stay actually rose with the level of managed care penetration. Furthermore, the study shows that hospitals in the South and West with the highest levels of managed care penetration had the lowest median percentages of outpatient revenue. This could be caused by more patients receiving care in freestanding outpatient clinics rather than in large settings.

What’s more, in markets where managed care penetration has been strong, hospitals with lower levels of managed care have raised their performance standards to match standards at hospitals with higher levels of managed care. Because some of the savings that managed care brought to the industry now appear to have been a one-time benefit, in the future we may see more uniform performance among hospitals with different levels of managed care penetration.

2. Small outperforms large. Smaller hospitals performed better than large hospitals in most criteria — both clinical and financial. In fact, hospitals with 25-99 beds ranked first in all three 100 Top clinical indicators — mortality index, complication index, and lengths of stay. Although historically we do not expect small hospitals to perform as well as larger hospitals in financial measures, the small benchmark hospitals had the highest outpatient revenue and total asset turnover ratio of any group, and lower expenses than all but the medium-sized benchmark hospitals.

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