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Making big gains by being 'a little bit better'

CEOs at the 100 Top Hospitals continue to break new ground.

Our research on this year's 100 Top winners shows that the leaders of teaching hospitals and small community hospitals are not just bending the rate of increase of the cost curve. Rather, these CEOs and their teams lowered overall adjusted inpatient cost per discharge between 2013 and 2014. For a number of winners, the 2014 cost per discharge was actually lower than the cost per discharge in 2010. Simultaneously, these CEOs ensured that quality rose substantially across readmissions, inpatient stays and 30-day mortality and complications.

So what is it about these CEOs that makes them stand out? A 2005 qualitative study performed by Cejka Search and Truven Health Analytics (then known as Solucient) showed that CEOs of frequent 100 Top winners (three wins out of five consecutive years) were not significantly different from CEOs of median performing hospitals in average age, experience, gender and many other characteristics. In practice, all CEOs turned over nearly 70% of the original executive team within two years of arrival. They all focused on financial and quality performance and all measured performance. But the 100 Top CEOs were significantly more likely to promote from within for open executive team positions and the currency of performance reporting was significantly more timely and frequent.

The 100 Top CEOs focused less on process and more on outcomes. The value of this study was a common thread running across the many findings. The difference between CEOs of 100 Top winners and CEOs of average-performing hospitals was not huge—it was nuanced. Sometimes all it takes to achieve major leaps is to consistently be “just a little bit better.”

That is the essence of our research findings examined in the story and data on the following pages. When we examined differences in cost in 100 Top winners versus peers over six years, the 100 Top award winners had lower costs in four hospital service lines we studied. When we examined cost more deeply, both 100 Top winners and peers were able to keep drug and lab costs relatively flat, but the 100 Top winners also kept intensive-care unit and routine costs substantially lower than peers.

This year's 100 Top supplement is dedicated to explaining how some of the 100 Top winners were able to cut costs just a little bit better than their peers. Their successes offer many approaches for healthcare leaders to consider as we continue the shift away from fee-for-service in the quest for value.


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