The measures of success used in the annual HCIA/Mercer analysis undergo some changes year to year as their importance rises or falls against market trends, and this year was no different.
Two measures were retired: long-term growth in equity, and year-to-year change in outpatient business as a percentage of total revenues.
Two clinical measures, mortality and complications, were spread over a two-year range to decrease the ups and downs of a one-year "snapshot."
And one measure that seemed to be outliving its usefulness a year ago-length of stay-was retained, as it took on renewed significance.
A central aim of the yearly analysis is to establish performance targets that the best hospitals are hitting and the rest of the nation's hospitals can shoot for. Productive use of assets, measured by asset-turnover ratio, and overall profitability, measured by cash-flow margin, continue to be crucial to selection.
But a measure of a hospital's ability to save for a rainy day-long-term growth in equity-had become unreliable because of increasing inconsistency in how hospitals report the elements that constitute it, says Jean Chenoweth, vice president of HCIA.
Outpatient business continues to be an important measure of management's response to the marketplace, but the movement's growth is a slowing trend in the hospital market, the study concludes.
The analysis continues to track total outpatient business as a percentage of total facility business, but a previous measure charting that movement over a three-year period did not give enough credit to leading institutions that had moved quickly in the mid-1990s, Chenoweth says.
A stall in average length of inpatient stays recorded in this year's study brought new importance to that measure. Reductions in length of stay had become equally routine for all hospital classes, and the study's designers last year toyed with the idea of dropping the measure.
The latest analysis, however, showed that facilities in the managed-care climate of the West are bottoming out on inpatient management and will stay there unless they adjust to delivering care under new expectations of clinical case management, Chenoweth says. But other regions are far behind the West and have room to improve on length of stay, she says.
The study's clinical indexes now cover actual deaths and complications in 1997 and 1996 instead of just the most recent year, taking a longer-term look and making a one-year blip less of a boon or a bane for hospitals, she says.