EVANSTON, Ill. (December 11, 2000) — The HCIA-Sachs Institute today released the findings of the eighth annual 100 Top Hospitals™ Benchmarks for Success study, which recognizes the nation's hospitals that have achieved excellence in quality of care, efficiency of operations and sustainability of overall performance.

The study found that industry-wide, hospitals experienced the biggest drop in profits since the study was first conducted in 1993. In spite of this fact, the 100 Top benchmark hospitals maintained significantly higher profitability than their peers, treated more difficult cases and achieved better overall outcomes. If all U.S. acute hospitals were to perform at the level of the 100 Top benchmark hospitals, expenses would decline an estimated $12 billion, resulting in lower health care costs and savings to Americans.

The study is based solely on objective, quantitative performance data that are consistent and complete across all U.S. hospitals, which were analyzed in groups based on size and teaching status.

"This year's study reflects the financial distress hospitals have encountered in the wake of the Balanced Budget Act of 1997," said Jean Chenoweth, executive director of the HCIA-Sachs Institute. "Despite the difficulties facing them, the 100 Top benchmark hospitals have maintained profitability and top clinical performance. This year's 100 Top Hospitals study truly highlights those institutions with superior management teams who can perform well under very adverse conditions while providing high-quality care to their communities on a consistent basis."

Highlights of the study's findings include:

• The 100 Top benchmark hospitals were found to have fewer complications and inpatient deaths than other hospitals. Quality of care as measured by mortality and complications indices was an average of 14 percent better at the 100 Top benchmark hospitals.
  
• Despite an increasingly acute patient population, use of more expensive services, and lower Medicare reimbursement rates paid to all hospitals under the Balanced Budget Act, benchmark hospitals exhibited more than three times the profitability of all other hospitals studied.
  
• The study revealed a regional disparity in performance, most notably in the number of top hospitals in the South (37) versus the Northeast (15). However, the number of top hospitals in the Northeast increased by the highest percentage of any region, nearly doubling since last year's study. The results show there is variability in the levels of hospital performance caused by competition, managed care and regulation.
  
• Benchmark hospitals also paid higher wages but employed fewer staff than peer hospitals.
  
• Benchmark hospitals had a median Total Profit Margin of 8.71 percent and a median Cash Flow Margin of 16.44 percent, compared with only 1.88 percent and 9.69 percent respectively for peer hospitals. These findings are the weakest since the study was first conducted in 1993.

Only one hospital in the nation, Brigham & Women's Hospital in Boston, has been selected as a benchmark hospital all eight years the study has been conducted. Sixty-three percent of this year's benchmark hospitals have been named to the list more than once. Of those, more than half have performed at benchmark levels for at least four years.

Study excerpts will be made available on http://www.100TopHospitals.com. Full copies of the 2000 100 Top Hospitals: Benchmarks for Success study are available for purchase on the Web site or by calling Customer Service at 1-800-568-3282.

The study analyzes the nation's hospitals using empirical performance data from the Medicare MedPAR aggregated claims database and other publicly available sources. This methodology ensures that the focus is on statistical rather than anecdotal evidence of top performance. The measures for the 2000 study stress quality of care, efficiency of operations and sustainability of overall performance, and are calculated for five classes of hospitals:

• Major Teaching - 15 hospitals 
• Teaching with less than 400 Beds - 25 hospitals 
• Large Community, 250+ Beds - 20 hospitals 
• Medium Community, 100 to 250 Beds - 20 hospitals 
• Small Community, 25 to 99 Beds - 20 hospitals

Seven overall measures were used to determine performance: risk-adjusted mortality index, risk-adjusted complications index, severity-adjusted average length of stay, expense per adjusted discharge, profitability, proportion of outpatient revenue, and productivity (total asset turnover ratio). All of the criteria were weighted equally in the evaluation process.

About HCIA-Sachs: The HCIA-Sachs Institute is the research and education division of HCIA-Sachs. The Institute is dedicated to the improvement of the health care industry through improved information. The Institute produces 100 Top Hospitals and Clinical Research Program studies, and publishes white papers - authoritative research reports, often clinical or financial - that explore the impact of legislation, new technologies, and clinical breakthroughs on the health care industry.

Clinical Research Program studies are dedicated to identifying the treatment patterns of 100 Top Hospitals award winners. The Institute produces clinical research studies, in conjunction with its Advisory Board, to improve clinical quality and delivery of care while providing education to the health care community. In 2001, HCIA-Sachs will be doing business as Solucient.

Editors Note: Additional information can be found at http://www.100tophospitals.com under media information.

CONTACTS:

Media:
   Tim Paul
   Schneider Integrated for HCIA-Sachs 
   (212) 402-5455 ext. 106
   tim@schneiderintegrated.com

   Stacey Whitaker
   Schneider Integrated for HCIA-Sachs
   (212) 402-5455 ext. 122 
   stacey@schneiderintegrated.com

Providers:
   Jean Chenoweth
   HCIA-Sachs Institute
   (734) 669-7941
   jchenoweth@solucient.com