Selection of the top 100 hospitals is based on eight statistical measures covering financial, operational and clinical performance:
Expense per adjusted discharge. Total operating expense is divided by number of discharges and adjusted for geographic differences in cost of living and case-mix complexity.
Cash-flow margin (profitability). The sum of net income, depreciation and interest expense is divided by the combined amount of net patient revenues and all other income. The nonoperating expenses of depreciation and interest are added to net income so they don't distort the financial measure of operations. The resulting percentage is the cash-flow margin.
Long-term debt to total assets (financial leverage).OPERATIONS
Average length of stay, severity-adjusted.
Investment in capital assets (net fixed assets per bed). The total value of plant, property and equipment, less accumulated depreciation, is divided by total number of staffed beds.
Charge per adjusted discharge. A hospital's total charges are divided by total discharges and adjusted for regional cost of living and differences in severity of illness.CLINICAL PRACTICES
Mortality, risk-adjusted. The number of actual deaths vs. expected deaths is expressed as a factor of 1. Hospitals with a score of less than 1 had fewer deaths than expected. Scores of more than 1 represented more deaths than expected. According to a model developed by HCIA, rates are based on the types of cases treated and their severity, plus differences in geographic location, size, teaching status and setting in the community. Post-discharge deaths are excluded.
Complications, risk-adjusted. The ratio of actual vs. expected complications among hospital patients, given the risk of complications, is also expressed as a factor of 1 and based on an HCIA model that adjusts for the same differences as the mortality model. Complications data are taken from indexes of surgery, cardiology, endoscopy, medical patients and all patients. Pediatrics and obstetrics are excluded.
Sources: HCIA, Mercer Health Provider Consulting