There are hundreds of financial and quality metrics that hospitals and other care facilities are expected to track and improve on. As the Centers for Medicare and Medicaid Services (CMS) continue to add and modify quality programs, it can be difficult for hospital leaders to focus on the most vital and easily-improved metrics.
Naturally, individual facilities will focus on specific metrics depending on their current and ideal performance. While some hospitals prioritize financial performance, others may seek to improve the patient experience. Below we've listed the top 10 essential hospital analytics to track, with examples from the Definitive Healthcare database.
Top 10 Key Hospital Metrics
- Length of Stay
Length of Stay measures the length of time between a patient's admittance to and discharge from a hospital. This metric is most often tracked over months and annual quarters, though it can also be tracked over the course of a few weeks. Length of stay measurement can be used throughout a hospital or for a specific therapy area, such as acute myocardial infarctions (AMIs).
Fig 1 Length of stay data for Massachusetts General Hospital. Insights from Definitive Healthcare based on most recent available CMS data.
This data is important because it provides hard data over time on care efficiency. Longer patient stays are associated with greater risk of hospital-acquired infections (HAIs) and other hospital-acquired conditions (HACs), as well as higher patient mortality rates. An exception to this rule are cardiac patients. Those admitted for heart failure see lower mortality rates with shorter hospital stays, but higher readmission rates. Like with other conditions, there is risk of releasing patients too early and overlooking potentially life-threatening complications.
Patient length of stay also impacts hospital financial performance. Naturally, the longer a patient stays at a hospital the more money is required to care for them. In addition to patient care costs, CMS emphasizes shorter patient stays where possible, offering financial incentives to reduce the time patients spend in hospitals for an episode of care.
- Readmission Rates
Readmission Rates track the percentage of patients that are admitted into the same or another hospital within 30 days of being discharged for the same condition or a complication from the original episode of care. This metric measures quality of care given to patients. High hospital readmission rates indicate that physicians and other care providers are not delivering the proper care to patients, overlooking complications or relevant patient data. Lower hospital readmission rates, by extension, indicate a strong quality of care.
Fig 2 Medicare Readmission Reduction Penalty Scores for Massachusetts General Hospital. Insights from Definitive Healthcare based on most recent available CMS data.
The average all-cause hospital readmission rate in 2016 is 15.3 percent according to Definitive Healthcare data (most recent data available). Harlan ARH Hospital had the highest all-cause readmission rate at 21.3 percent--more than 1 in five patients was readmitted to a hospital within 30 days of discharge. New England Baptist Hospital and the Hospital for Special Surgery (NY) tied for lowest readmission rates with 11.3 percent.
High readmission rates could also be a detriment to hospital financials. Hospitals with the highest readmission rates may not receive full Medicare reimbursement payments as a penalty. Walking the line between short patient stays and low readmission rates is a difficult task, but it is important for patient health as well as hospital financial health.
The Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey measures 64 markers of patient satisfaction. Topics included in the survey range from care quality to cleanliness of the care facility. Results from the survey are released as star ratings on a scale of 1 to 5, with 5 being the best possible score. HCAHPS scores provide actionable data on how hospitals can improve patient care and services offered.
Top 10 5-Star Hospitals by Average Daily Census
Hospital Name Average Daily Census Net Patient Revenue (M) Mayo Clinic - Arizona 191.5 $1,188 Oklahoma Heart Hospital 79.7 $272 South County Hospital 49.0 $159 Memorial Hospital And Health Care Center 40.4 $212 St Joseph Mercy Chelsea 27.9 $138 Avera Heart Hospital 23.8 $101 Texas Orthopedic Hospital 23.4 $151 Hill Country Memorial Hospital 21.0 $76 Arkansas Surgical Hospital 18.4 $67 Texas Spine and Joint Hospital 14.8 $91
Most criticisms of the HCAHPS system center around the simplistic manner of the star system. Hospital leaders argue that the ratings are misleading, as they do not always provide the whole picture of patient care. Similarly, experts expressed concern that hospitals serving poor and high-risk populations are unfairly penalized through this system, and particularly hospitals with high patient volume, such as those listed above. Average daily census refers to the mean number of patients admitted to the hospital every day.
According to Definitive Healthcare data, of the 3,264 hospitals that received an HCAHPS star rating, only 125 hospitals achieved 5 stars—less than 4 percent. Approximately 34 percent received a 4-star rating (1,122 hospitals), nearly 44 percent received a 3-star rating (1,428 hospitals), almost 16 percent received a 2-star rating (520 hospitals), and about 2 percent received a 1-star rating (69 hospitals). An additional 287 did not meet reporting standards, and therefore did not receive a star rating.
- Mortality Rates
Patient mortality rate measures the percentage of patients that die in a hospital's care before being discharged. This metric is a strong indicator of providers' ability to stabilize a patient's condition following surgery or another procedure. According to the Centers for Disease Control (CDC), the national average patient mortality rate is 2 percent, for a total of 715,000 patient deaths annually.
Fig 4 Serious Complication and Death Measures for Massachusetts General Hospital. Insights from Definitive Healthcare based on most recent available CMS data.
Of the 2 percent of patients who died before being discharged, about 25 percent were over 85 years old. In addition, the average patient mortality rate fell by 0.5 percentage points (approximately 20 percent) since 2000. According to Definitive Healthcare data, the average heart attack mortality rate was 13.5 percent in 2016 (most recent data available). Magnolia Regional Health Center and Erlanger Baroness Hospital tied for the highest heart attack mortality rate with 18 percent. Sherman Oaks Hospital had the lowest mortality rate with 9.6 percent.
- Bed Utilization Rate
Bed Utilization Rate (also called Bed Occupation Rate) refers to the number of hospital beds being used at any given time. Knowing bed demand in real time is important to providers who need to know the difference between available beds and patients awaiting care.
Fig 5 Bed Utilization Rate and other clinical metrics for Massachusetts General Hospital. Insights from Definitive Healthcare based on most recent available CMS data.
Balancing bed availability can be difficult. If occupancy is too low, the hospital is likely losing money through unnecessary staffing and facility maintenance.If occupancy is too high, care quality could decline because there aren't enough physicians to care for the admitted patients. According to Definitive Healthcare data, the average bed occupancy rate is 48.8 percent. The rate rate is higher for urban hospitals than for rural hospitals. Urban hospitals have an average bed utilization rate of 64 percent, where rural hospitals have an average rate of 43 percent.
Hospital incidents include unintentional consequences or side effects of hospital procedures, including conditions like sepsis, postoperative respiratory failure, pulmonary embolisms, hemorrhages, and other reactions or infections. This metric measures the ability of healthcare professionals to provide comprehensive, high-quality care to patients without triggering an adverse reaction.
Fig 6 Therapy Area Analytics: Sepsis DHC Visual Dashboard. Insights from Definitive Healthcare based on most recent available CMS data.
Tracking hospital incidents is vital to understanding the quality of care a facility is providing. Incidents provide hard data on what steps a hospital should take to improve its services as well as reduce patient mortality and readmission rates. According to Definitive Healthcare data, 769 hospitals reported receiving a penalty for hospital-acquired conditions in fiscal year 2017.
- CMS Program Performance:
CMS spearheads dozens of initiatives aiming to reduce overall healthcare costs and improve care quality across the country. Some of these programs, like the Medicare Shared Savings Program, target Accountable Care Organizations (ACOs). Others, like Fee-For-Service Part B, target hospital spending. Regardless of the target facility or organization, CMS value-based programs offer financial rewards for improvement on a variety of clinical and quality metrics.
Top 10 BPCI Model 2 Hospitals by Net Patient Revenue
Hospital Name Net Patient Revenue (M) Discharges UCSF Medical Center at Parnassus Heights $3,222 35,009 NYU Langone Medical Center - Tisch Hospital $3,192 48,662 Montefiore Medical Center Main Campus - Henry And Lucy Moses Hospital $2,690 87,012 Vanderbilt University Hospital $2,534 57,158 Yale New Haven Hospital $2,527 69,951 Hospital Of University Of Pennsylvania $2,236 34,985 Mount Sinai Medical Center $2,213 56,507 Carolinas Medical Center $2,199 26,896 Orlando Regional Medical Center $1,846 84,413 Ohio State University Hospital $1,796 47,238
Participation in these programs can lead to improvement in care quality, efficiency, technology use, and more. CMS incentive programs serve as beta tests to improve care delivery while lowering costs. In addition to the obvious financial incentives, participating facilities also have a plethora of data to analyze in order to improve on the most relevant measures.
- Average Cost per Discharge
Tracking the average care costs per patient discharged can aid hospitals understanding of which therapy areas see overspending. Similarly, this metric shows where hospitals make the greatest profit as well as whether the costs associated with patient care actually improved the patient's outcome. Cost per discharge is a dynamic measure that can be adjusted for a hospital's case mix and other patient population demographics.
Fig 8 Cost per Medicare Discharge for Massachusetts General Hospital. Insights from Definitive Healthcare based on most recent available CMS data.
Tracking this metric can help hospitals understand long-term spending by therapy area and adjust care provision accordingly. Over time, high care costs and low profits can negatively impact hospital performance and care offerings, reducing the variety of services available and physicians on staff.
- Operating Margin
A hospital's operating margin refers to the facility revenue after subtracting operating costs such as wages, medical equipment and supplies, rent, and other expenditures. To remain operational, hospitals must be able to pay these fixed costs without going into debt.
Fig 9 Net Operating Profit Margin and other financial strength indicators for Massachusetts General Hospital. Insights from Definitive Healthcare based on most recent available CMS data.
According to Definitive Healthcare data, the average net operating margin is -3.3 percent, meaning that the majority of hospitals are not turning a profit. Of hospitals with a positive operating margin, the average is 11.3 percent. Hospitals with a negative operating margin averaged -20.7 percent. Of the 7,800 hospitals tracked by Definitive Healthcare, 21 reported a profit margin of 0.
- Bad Debt
Bad Debt refers to revenue loss that occurs when a hospital requests payment from a patient for care provision and does not receive the full amount. New, narrower guidelines were enacted as of January 1, restricting what qualifies as bad debt. Under the original guidelines, any lack of repayment was reported as bad debt. Now, bad debt is only valid if there was an event in a patient's life, such as unemployment, that led to the inability to pay for their care.
Fig 10 Financial Comparisons: Financial Ratio Analysis DHC Visual Dashboard featuring Bad Debt to Net Patient Revenue and Net Income Margin . Insights from Definitive Healthcare based on most recent available CMS data.
With these new bad debt guidelines uncompensated care, including charity care, will still be provided to patients, but the way it is reported will change. A high bad debt ratio can impact the amount of charity care a hospital is able to provide to patients. Bad debt also negatively impacts hospital revenue, restricting available services.
According to Definitive Healthcare data, the average bad debt to net patient revenue ratio is 9.4 percent. Only six of the 4,500 hospitals reporting bad debt claimed a negative ratio. Of those six, only one hospital also reported a negative net patient revenue.
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