Benchmark Hospitals Provide Better Care,
Operate More Efficiently, Produce Superior Financial Results

Small Hospitals Take Lead in Setting Quality Benchmarks

Widespread Adoption of Benchmark Practices
Could Save More Than $26 Billion Annually

Baltimore, MD, December 7, 1998 – This year’s 100 Top Hospitals and the 1998 industry-wide benchmarks for hospitals were released today by HCIA L.L.C. and William M. Mercer, Incorporated. The sixth annual 100 Top Hospitals: Benchmarks for Success study, conducted by HCIA and Mercer’s health care provider consulting practice, identifies industry benchmarks by recognizing the U.S. hospitals that deliver the most cost-efficient and highest quality medical care.

The study found that smaller hospitals performed better than large institutions in most clinical and financial elements. In fact, hospitals with 25–99 beds ranked first in all three of the study’s clinical indicators.

For the fourth consecutive year, the South leads the group with 43 percent of all benchmark hospitals located in this region. The West is the second best represented part of the country, with 18 percent of all benchmark hospitals located there.

Once a hospital attains benchmark status, it tends to continue its solid performance. A full 63 percent of this year’s benchmark hospitals have won this award at least once previously. Among these, 14 have performed at benchmark levels for at least four years, and one, Brigham and Women’s Hospital in Boston, Mass., has qualified all six years the study has been conducted.

While wide variations in quality and financial performance still exist in the nation’s health care system, the performance of the 100 benchmark hospitals in the HCIA-Mercer study offers a direction for positive change:

• Quality, as measured by mortality and complications, at benchmark hospitals was at least 16 percent better than that at other hospitals.
• Benchmark hospitals do more with less. On average they employ 18 percent fewer staff members per unit, have 22 percent higher occupancy, and are 38 percent more profitable than other hospitals in the study group.
• For complex cases, benchmark hospitals have an average length of stay that is 7 percent shorter than that of their peers.
• If all U.S. acute-care hospitals were to operate like the 100 Top Hospitals, national health care expenses would decline by an aggregate $26.3 billion a year.

"The U.S. health care market is growing increasingly complex and unpredictable," says Mercer consultant John Kralovec. "Health care costs are heading up, and Medicare payments are being reduced. To remain competitive in this tough environment, hospitals need to closely examine — and consider adopting — the best practices of these consistent top performers."

"Over the past six years, the empirical results of the 100 Top Hospitals study have proved that hospitals can excel as managed care penetration deepens, financial pressure increases, and the demand for quality intensifies," says Jean Chenoweth, HCIA senior vice president. "These hospitals have superior management teams that thrive on adversity and make their organizations function on all cylinders."

The HCIA-Mercer study is based solely on objective, quantitative data that are consistent and complete across the United States. This methodology ensures that the focus is on statistical rather than anecdotal evidence of top performance. The measures for the 1998 study stress quality of care, efficiency of operations, and sustainability of overall performance.

This year’s ranking is based on the following eight measures of clinical quality practices, operations, and financial management:

1. Risk-adjusted mortality index
2. Risk-adjusted complications index
3. Severity-adjusted average length of stay
4. Expense per adjusted discharge, case mix- and wage-adjusted
5. Profitability (cash flow margin)
6. Proportion of outpatient revenue
7. Index of total facility occupancy
8. Productivity (total asset turnover ratio).

Copies of the 1998 study, 100 Top Hospitals: Benchmarks for Success, can be purchased from HCIA Customer Service at 800/568-3282. A summary version of the study can be found here and on Mercer’s Web site at http://www.wmmercer.com.

HCIA Inc. collects, manages, and distributes comparative health care information. Its customers deliver, purchase and manufacture health care products and services. By combining industry leading databases, methodologies, and analytic services, HCIA creates information assets that help customers manage health care costs and improve patient care.

William M. Mercer, Incorporated, one of the nation’s leading health care and human resource consulting organizations, helps the health care industry meet the challenges of rapid, radical change. The firm works with health care organizations to reduce costs while improving quality of care, patient satisfaction, and customer service, to integrate the delivery of services, and to manage risk in a fixed-reimbursement environment. Contact 800/765-0054 for more information. Headquartered in New York and with offices in 39 other U.S. cities, the firm is the U.S. operating company of William M. Mercer Companies LLC.

Contacts:

Jean Chenoweth
HCIA Inc.
(734) 669-7941 (jchenoweth@solucient.com)

Stephanie L. Poe
William M. Mercer, Incorporated
202-331-5210 (stephanie_poe@mercer.com)