The financial database, used in calculating the study’s cost data, contains more than 800 data elements for over 6,000 U.S. acute care and specialty hospitals. The primary source of these data is the Medicare cost report, which is filed annually by every U.S. hospital that participates in the Medicare program. Data from the Medicare cost report are used to calculate all the financial measures for this study. Hospitals are required to submit the cost reports in order to receive reimbursement from Medicare, but the data in the report are "all-payer"; i.e., for all patients, not just Medicare beneficiaries.

THE STUDY GROUP:  Our study group included U.S. hospitals that had at least 200 patients, aged 65 and over, coded to a diagnosis-related group (DRG) in Major Diagnostic Category (MDC) 08, Disease and Disorders of the Muscoloskeletal System and Connective Tissue, in fiscal 1998 and in 1999. To be in the study, a hospital had to have at least 200 unique patient cases and at least 30 cases in each of four procedure groups: total knee replacements; total hip replacements; a combination of partial hip replacement; or Open Reduction with Internal Fixation of Femoral Neck. Data for nearly 1,200 hospitals were included.

THE COMPARISON GROUPS: Teaching and residency programs have a profound effect on the types of patients a hospital treats and the scope of services it provides. It is crucial that when analyzing the performance of an individual hospital, it be evaluated against other like hospitals. Accordingly, we assigned each hospital in each study group to one of three comparison groups according to its teaching status:

• Teaching hospitals with orthopedic residency programs
• Teaching hospitals (without orthopedic residency programs)
• Community hospitals (non-teaching)

Teaching status was defined using Medicare cost report information. To determine whether a hospital had a residency program in orthopedics, we consulted the Graduate Medical Education Directory, 1998–1999, published by the American Medical Association. 

THE PERFORMANCE MEASURES: We compiled a group of six measures of clinical quality practices, operations, and financial management that we believe constitutes the most reliable, scientific way possible to produce benchmarks for superior hospital quality:

1. Mortality index, risk-adjusted for severity of illness
2. Complications index, risk-adjusted for severity of illness
3. Count of unique patients receiving orthopedic services
4. Average length of stay at the hospital, adjusted for illness
5. Cost per patient, adjusted for illness severity and local wage differences
6. Percentage of patients who came from and were discharged to home

We strove to do more than simply name top-performing hospitals. The aim of the 100 Top Hospitals series is to use our findings to guide the care of all patients--in this case, of orthopedic patients—by setting forth industry benchmarks. Accordingly, we calculated the median values for each of the six performance measures for the 100 Top hospitals and for the rest of all U.S. hospitals, as well as the percentages by which these benchmark medians exceed the rest of the nation. To establish some more specific, yet widely applicable benchmarks, we also calculated benchmarks for four common orthopedic procedures: Total Hip Replacement, Total Knee Replacement, Partial Hip Replacement, and Open Reduction with Internal Fixation of Femoral Neck.