Each year since 1993, Solucient (formerly HCIA-Sachs), an Evanston, Ill.-based healthcare information company, has scrutinized the clinical and financial performance of some 6,000 acute-care hospitals of all types and sizes. Its mission: to assess and make available information about management teams that are able to provide the highest quality care while containing costs and performing financially.
In honoring 615 institutions since the project began, 100 Top Hospitals: Benchmarks for Success has done more than just give a pat on the back to those facilities that thrive despite obstacles. The published results provide all hospitals with detailed clinical and operating intelligence in the hopes of rendering contagious the winners' success.
"Our purpose is to identify hospitals that can be counted on to show continuity in providing efficient, quality care," says Jean Chenoweth, executive director of the Solucient Leadership Institute, the research and education division of the parent company. "And while they might not make the list every year, they're very close to making it."
If all acute-care hospitals in the United States were to operate like the top 100, overall expenses would be reduced by $12 billion a year, Solucient's 2000 study says. Likewise, the company found that the number of complications would be reduced by 58,000 and the number of deaths would decline by almost 87,000.
This supplement should serve as a summary guide to the thoughtful management processes that have helped create such exemplary goals.
To ensure an apples-to-apples comparison, Solucient placed hospitals in one of five categories based on size and teaching status: small hospitals, medium hospitals, large community hospitals, teaching hospitals and major teaching hospitals. Using 1999 Medicare cost report data, the company ranked these facilities on seven measures of clinical, operational and financial performance.
While it is clear that innovation and creativity help to advance efficiency and good outcomes, many hospital executives also emphasize a firm
adherence to fundamental business practices. Teamwork, accountability, growth, cost control and continuous quality improvement-time and time again, at hospital after hospital, these are the areas where CEOs and medical leaders say marked concentration pays off.
"We find managers and executives who are able to communicate the goals very clearly at all levels of the organization," Chenoweth says. "Many hospitals that win the award for the first time say they don't know what they did. That's because they've been so focused on performance improvement that they haven't realized how far they've come in comparison to peers."
Administrations at all of these hospitals have learned first-hand, either by plan or accident, that improvement opportunities from both economic and clinical standpoints are directly related.
"The process really begins with a cultural change and the establishment of core values that your management team and medical staff all buy into," says Joel Bergenfeld, CEO of the Florida Medical Center in Fort Lauderdale, Fla. The 459-bed, Tenet-owned facility was a first-time winner among 20 institutions in the large community hospital category.
When he took the helm two years ago, Bergenfeld says, it was as part of a new management team that came together to take over a high-quality hospital that had suffered from many ownership and management changes as well as changing demographics in its community.
"The company realized that if we could reduce the number of complications and improve employee and patient satisfaction, our turnover would decrease and volume would increase," he says. "We put a heavy emphasis up front on collection and cash flow."
Top hospitals' median cash flow margin for 1999 was 16.4%, or 7% higher than the median for the peers, the widest gap since 1994.
At the same time, the premier hospitals pay an average of $41,963 for employee salary and benefit expenses, compared with $39,078 for peer hospitals. Yet the benchmark hospitals have only 4.9 adjusted full-time-equivalent employees per adjusted average daily census as opposed to 5.2 for peer hospitals.
"Each year we set objectives for financial improvement, quality improvement and improvement in measured satisfaction among staff, employees and patients," says John Meehan, president and CEO of Hartford (Conn.) Hospital, a winner in the major teaching hospital category. "Then we work with staff to develop our performance improvement plans." Four-time winner Hartford is an 874-bed, not-for-profit partner of the Hartford Healthcare Corporation, which is owned by the Connecticut Health System.
Meehan and his team's goals are reflected in the benchmark findings. In the midst of Medicare payment cuts and dwindling managed-care payments, the median top 100 hospital posted an 8.7% total profit margin. Other hospitals in the study squeaked by with a 1.9% margin.
In terms of improving outcomes, second-time winner Paradise Valley Hospital in Phoenix, takes pains to monitor and measure both quality
and resource management on a quarterly basis.
"It provides us data to work with both physicians and hospital employees in looking at mortality, length of stay and so on," says Rebecca Kuhn, president and CEO of the 140-bed facility, owned by Triad Hospitals of Dallas.
Despite the increasing severity of the patient population and the increased use of more expensive services, patients at top-performing hospitals have fewer complications during their stay. The median top 100 complications index was 13.6% below the median for nonwinners.
Paradise Valley starts the process with its service center structureÃmultidisciplinary teams who meet monthly to examine quality data. Kuhn says they also take the data to physicians through the formal medical staff process where a number of doctors have the opportunity to look at the data, question it and make practice changes that will improve quality.
In addition, Paradise Valley, one of 20 medium-sized hospitals on the top 100 list, employs a medical director for quality who meets one-on-one with physicians to discuss how they can improve care.
"We don't spend all of our time hammering on cost-effectiveness unless we can prove how that improves the care of their patients," Kuhn says. She explains the physicians' level of sophistication in balancing the two in how they approach analyzing the institution of a new procedure.
"Our medical executive committee asks questions about clinical outcomes and efficacy, as well as about cost and reimbursement issues," Kuhn says. "Even when they find the whole procedure makes sense clinically, if it doesn't make financial sense, they won't recommend it. For one particular use, it was still deemed experimental and because the reimbursement was not there, they rejected it."
The top hospitals have taken median average length of stay to a five-year low of 4.1 days, a mark that is 7% lower than the peer group median of 4.4 days.
Gerald Barbini, CEO of Hubbard Regional Hospital in Webster, Mass., outlines his team's strategic plan, which combines three components: meeting the market's needs; controlling costs; and continuing to look for growth opportunities.
"Everything else kind of falls from meeting community healthcare needs," Barbini says. With just 27 acute-care beds, this private, not-for-profit community hospital, managed by Quorum Health Resources, uses its very high patient satisfaction reports to try to partner with the big managed care providers in the heavily penetrated south Worcester County market.
"Forty percent of our volume comes from one HMO," Barbini says. "We've identified mutual business objectives--they want to sell their product, we want people to use our hospital."
He notes that in Massachusetts, hospitals have been in cost containment mode for at least eight years. And while Hubbard continues to tightly control expenses, Barbini says, clinically, it has reached the point where costs can't be reduced any further. Subsequently, the hospital has moved into sub-acute care, built an 83-bed assisted living facility and is working on a structured outpatient mental health program.
In a reverse trend from the large community and major teaching hospital categories, within the small, medium and teaching hospital groups, the median benchmark hospital had a higher percentage of total revenue coming from outpatient services than the median peer hospital.
At 38-bed Enumclaw (Wash.) Community Hospital, a fellow winner in the small hospital category, CEO Dennis Popp echoes that staff, physicians and board members alike share a feeling of accountability to the community they serve and live in.
"We have a practice of electing our board members to be geographically representative of the communities we serve," Popp says. "They wouldn't expect to be treated as just a number in their own community hospital, so they take that representation very seriously."
By allowing various staff members to participate in decisions, they "spend just like it's coming out of their own pocket," Popp says.
Thomas Herron, president and CEO of the four-time 100 Top Hospital winner Largo (Fla.) Medical Center, credits the free flow of information, both good and bad, with any organization's success.
The 256-bed facility is owned by HCA-The Healthcare Co.
"We consistently evaluate our performance and share the results with our staff, warts and all," Herron says. "If we look bad, we're honest with ourselves and try to devise an action plan to improve. When the snake enters the tent, what do you do? We kill the snake. We spend a lot of time problem solving and taking action."
Yet, he adds, something else that does an organization good is internally recognizing its achievements. "We take every opportunity to celebrate any success we get, no matter how small or great."
Modern Healthcare reporter Ed Lovern contributed to this story.