The following is an excerpt from Navigant Healthcare’s Pulse Weekly. Click here for a complete copy of this week’s article.
Last week, Truven Health Analytics released its 100 Top Hospitals for 2015: 15 made the list for the first time while 6 achieved its highest recognition 10 or more times in recent years. Notably, among the newcomers, only 1 cracked the list among the 40 largest Teaching Hospitals recognized—quite an accomplishment since Truven’s methodology is among the most rigorous, incorporating data about quality (mortality, complications, readmissions, etc.) efficiency (spending per beneficiary, financial performance) and the patient experience to assess the 2787 hospitals in its sample population.1
Also last week, Health Affairs published a study suggesting ratings like these might be confusing: the research team examined four national ratings systems (HealthGrades, Leapfrog Group, US News and World Report, CMS Hospital Compare) finding no consistency across the lists. “No hospital was rated as a high performer by all four national rating systems. Only 10% of the 844 hospitals rated as a high performer by one rating system were rated as a high performer by any of the other rating systems. The lack of agreement among the national hospital rating systems is likely explained by the fact that each system uses its own rating methods, has a different focus to its ratings, and stresses different measures of performance….Hospital rating systems use a variety of methods for distinguishing “high” performers from “low” performers, often creating the paradox of hospitals’ simultaneously being considered best and worst depending on the rating system used. For example, 43% of hospitals classified as having below-average mortality by one risk-adjustment method were classified as having above-average mortality by another method.”2
While at Vanderbilt Medical Center years ago, I asked my research assistants to examine “Top 100” lists of hospitals to compare methodologies. I still recall one of their major findings: more than 1,400 hospitals could lay claim to being a Top 100 on at least one list. That means one in four hospitals can advertise its superiority and in urban markets it also means other hospitals are likely to do the same.
So do these report cards matter? Yes, and they’ll matter more in coming months. Here’s why:
- Methodologies for rating hospitals are improving. Not every report card is as reliable as the next: methodologies matter. The validity and reliability of their metrics will be more closely associated with clinical and financial performance along with patient experiences. And digital apps like the Health Care Cost Institute’s Guroo and others will make cost data more accessible to consumers so costs can be compared. Looking ahead, the current players in the hospital report market sector will face pressure to demonstrate the predictive value of their report card—how a high rating correlates to a better outcome and lower cost for a specific patient populations adjusted for signs, symptoms, risk factors and co-morbidities. The data upon which the report cards depend will expand from publicly accessible utilization and claims information from clearinghouses to include proprietary clinical algorithms from medical records from the hospital, its clinics affiliated physicians, post-acute and alternative health network. Historically, Medicare data was a primary payer source; looking ahead, data from individuals, employers, Medicaid, and private insurers will be vital elements in report cards for hospitals. So hospital report cards will be derived from a wider cadre of sources and more closely correlated to their actual performance in specified acute, outpatient and post-acute transactions. That’s quite a leap from the current state of hospital report cards.
- The stakes are higher as hospitals become health systems. Simply put: hospital report cards today are based on data that’s verifiable from third party sources, but they’re more useful in support of advertising efforts to enhance the hospital’s reputation than to position the health system and its affiliates to compete and perform in the value-based purchasing world ahead. Hospital report cards will be replaced by health system scoreboards that encompass acute and outpatient services, pharmacy, post-acute, retail and in some, the insurance plan it operates. A system’s participation in and results from ACOs, bundled payments, medical homes and shared savings initiatives will be publicly accessible. And consumers will demand more information about the system’s Curve 2 models of care—how behavioral and physical medicine is integrated, how treatment plans incorporate patient preferences and values, how care is individualized and organized, how unnecessary tests and procedures are minimized and even how executives and clinicians are compensated. The health system report card of the future extends beyond the traditional boundaries of hospital operations and the traditional definitions of ‘hospital competition.’ Report cards about a health system’s “system-ness”—efficiency, outcomes, avoidable costs, consumer experiences, and more—will be the basis for attracting the right partners, securing capital for growth, and capturing customers (consumers, not patients) in the transition to Curve 2 health.
Report cards are an American way of life: we get them at school starting at an early age, and we expect them in every major purchase category. Relative to other industries, ours is untapped for the potential for report cards that matter.
P.S. On February 12, HHS announced its new Oncology Care Model program Deadlines for Letters of Intent are due by March 19, 2015 and applications by April 23. LOI forms are available for download on the Oncology Care Model website, and should be submitted by email to the Oncology Care Model inbox. Note: for more information about this program, contact at. Note: while participation in this bundled program for cancer might not be appropriate for every organization, it suggests cancer care payments and oversight is about to change. Look for a special Issue Brief: “Cancer Care Bundled Payments and Market Changes: What’s Ahead” from the Navigant Center for Healthcare Research and Policy Analysis next week.
Sources: 1Sabriya Rice, “Consistent High Performers; Truven 100 Top Hospitals focus on standardization to improve outcomes and reduce costs,” Modern Healthcare, March 2, 2015; 2Matthew Austin, Ashish K.Jha, Patrick S. Romano, Sara J. Singer, Timothy J. Vogus, Robert M. Wachter, and Peter J. Pronovost, “National Hospital Ratings Systems Share Few Common Scores And May Generate Confusion Instead Of Clarity,” Health Affairs, March 2015, vol. 34 no. 3423-430; Anna D. Sinaiko, Diana Eastman, Meredith B. Rosenthal, “How report cards on physicians, physician groups, and hospitals can have greater impact on consumer choices,” Health Affairs, 2012, 31(3):602; PR Lindenauer, D. Remus, S. Roman, MB Rotherberg, EM Benjamin, A Ma, DW Bratzler , “ Public reporting and pay for performance in hospital quality improvement,” New England Journal of Medicine, 2007, 356(5):486–96; “Roadmap for implementing value driven healthcare in the traditional Medicare fee-for-service program,” Centers for Medicare and Medicaid Services, January 27, 2015; Gregory K. Mulvey, Yun Wang, Zhenqlu Lin, Oliver J. Wang, Jersey Chen, Patricia S. Keenan, Elizabeth E. Drye, Salf S. Rathore, Sharon-Lise T. Normand, Harlan M. Krumholz , “ Mortality and readmission for patients with heart failure among U.S. News & World Report’s top heart hospitals,” Circulation Cardiovascular Quality Outcomes., 2009,2(6):558–65; OJ Wang, Y Wang, JH Lichtman, EH Bradley, SL Normand, HM Krumholz , “’America’s Best Hospitals’ in the treatment of acute myocardial infarction,” Archives of Internal Medicine, 2007, 167(13):1345–51; LK Halasyamani, MM Davis , “Conflicting measures of hospital quality: ratings from ‘Hospital Compare’ versus ‘Best Hospitals’,” Journal of Hospital Medicine, 2007, 2(3):128–34; Nicholas H. Osborne, Lauren H. Nicholas, Amir A. Ghaferi, Gilbert R. Upchurch, Justin B. Dimick , “Do popular media and Internet-based hospital quality ratings identify hospitals with better cardiovascular surgery outcomes?” Journal of the American College of Surgery, 2010;210(1):87–92; David M. Shahian, Robert E. Wolf, Lisa I. Lezzoni, Leslie Kirle, Sharon-Lise T. Normand , “Variability in the measurement of hospital-wide mortality rate,” New England Journal of Medicine, 2010;363(26):2530–9; Jordan Rau, “Hospital ratings are in the eye of the beholder,” Kaiser Health News,March 18, 2013; “HealthGrades research reports, top hospitals, and methodologies,” HealthGrades, January 27, 2015; Leapfrog Group. “About the Score,” Leapfrog Group, January 27,2015; . “How safe is your hospital? Our new ratings find that some are riskier than others,” Consumer Reports Magazine, August 2012; “Scoring healthcare: navigating customer experience rating,” PwC Health Research Institute, 2013
The opinions expressed in this article are those of the author and do not necessarily represent the views of Navigant Consulting, Inc. The information contained in this article is a summary and reflects current impressions based on industry data and news available at the time of publication. Any predictions and expectations noted herein are inherently uncertain and actual results may differ materially from those contained in this article. Navigant undertakes no obligation to update any of the information contained in the article.
©2015 Navigant Consulting, Inc.