For the past several years, Tomah (Wis.) Memorial Hospital has been recommitting financial and human resources in an effort to drive continuing improvement in clinical quality and cost efficiency.
The hospital has been collaborating with regional players to provide tertiary services and investing in information technology advances. And it was designated as a critical-access hospital in 2002, downsizing to 25 beds from 49 beds. The designation allows Tomah Memorial to receive cost-based reimbursement for Medicare and Medicaid patients.
All of its efforts appear to have paid off, as the hospital has landed on Solucient’s inaugural list of the “100 Most-Improved Hospitals.” Solucient, an Evanston, Ill.-based healthcare information company, also produces the “100 Top Hospitals” list, which it has been publishing for 10 years.
The leaders in performance improvement “are very dependable hospitals in terms of their commitment to improvement. They have improved simultaneously across patient care, financial performance and operational efficiency,” says Jean Chenoweth, Solucient’s executive director. “They have reduced mortality faster, reduced complications faster, cut expenses faster, and cut length of stay faster. They are increasing their value to their communities at a faster rate than other organizations,” Chenoweth says.
To select hospitals for its list of 100 improved performers, Solucient analyzed Medicare cost reports and Medicare Provider Analysis and Review, or MedPAR, data from federal fiscal years 1996 through 2001. A total of 2,866 hospitals were included in the study. Solucient groups hospitals into five categories and then compares hospitals within each category. Those categories are: major teaching hospitals with 400 or more beds and significant teaching involvement; teaching hospitals with 200 to 399 beds; large community hospitals with 250 or more beds; medium community hospitals with 100 to 249 beds; and small community hospitals with 25 to 99 beds.
Because the study of performance improvement measures the rate of change, not all of the hospitals on the list are setting national benchmarks for performance. About one-fourth, or 24, of the hospitals on the list of leaders of improved performance also have been named to Solucient’s “100 Top Hospitals” at least once in the past 10 years. Others “are on their way to being the best performers,” Chenoweth says.
Setting benchmarks
Hospitals were ranked on eight measures of clinical and financial performance. On all measures, which are reported as annual averages, overall performance at hospitals on the list improved at a faster rate than peer facilities. For example, from 1997 to 2001, the hospitals on Solucient’s “Most-Improved” list, or benchmark hospitals, posted the following results:
* Saw average length of stay drop more than one-fifth of a day per year, compared with an average of 0.08 days among their peers.
* Saw operating profit margins rise more than half a percentage point each year, compared with 0.03 percentage points for their peers.
* Saw expenses per adjusted discharge drop an average of $40, compared with an increase of $159 at other hospitals.
* Saw their mortality index decrease an average of 0.07 index points per year, compared with 0.02 points at other hospitals.
* Saw their complication index decrease an average of 0.05 index points each year, compared with a 0.01 index-point drop for other hospitals.
Results within hospital classes mirrored the national results with a number of notable exceptions. In the major teaching hospital category, average expenses per adjusted discharge for the benchmark group increased $68 per year, although that group still did better than its peers, which saw expenses increase $258 per year. The major teaching hospital benchmark group, however, still racked up an improvement in profitability, 0.13 percentage points per year, compared with a 0.52 percentage point drop in the peer group. In the large community hospital category, profitability at benchmark hospitals dropped 0.33 percentage points per year-nearly identical to the 0.32 percentage-point drop at peer hospitals.
Medium and small hospitals fared better than the national averages. In the small community hospital category, average expenses per adjusted discharge for benchmark hospitals dropped $72, average length of stay dropped 0.28 days and profitability increased 1.6 percentage points per year. At medium community hospitals, average expenses for benchmark hospitals dropped $51 per year and the average length of stay decreased 0.28 days. Although operating profitability for medium-sized benchmark hospitals increased 0.79 percentage points per year, it was 0.36 percentage points less than the 1.15 percentage point increase at peer hospitals.
Nursing hospitals to health
Hunterdon Medical Center, Flemington, N.J., is an example of a medium-sized benchmark hospital. What has been its formula for improvement? “It’s the combination of excellent medicine and excellent nursing. We in management have attempted to pay attention to the employees, and the employees have paid attention to the patients,” says Robert Wise, president and chief executive officer of Hunterdon Healthcare System, which includes a 180-bed hospital and numerous outpatient sites.
Nursing units are self-governing, fostering collaboration among nursing employees. In addition, registered nurse-to-patient ratios are strong, Wise says. In medical-surgical units, the ratio is 1-to-5 during day and evening shifts, and 1-to-6 during night shifts. From 75% to 80% of nursing employees are registered nurses. Wise credits self-governance and the nurse-to-patient ratios for an enviable 4% turnover rate in the nursing staff.
Tomah Memorial’s performance increases were partially a result of better collaboration with players outside the institution, officials say. The hospital competes with two heavyweight systems based in La Crosse, Wis., about 45 miles to the west, that operate primary-care clinics in Tomah: Franciscan Skemp Healthcare, part of the Mayo Health System, and Gundersen Lutheran, parent of Gundersen Lutheran Medical Center.
But part of the hospital’s success with performance improvement is a result of management’s decision to foster collaborative relationships for tertiary services with these same institutions. For example, a year and a half ago Tomah Memorial began leasing space for colonoscopies to physicians from both Franciscan Skemp and Gundersen Lutheran. “We don’t want them to take our patients out of our community,” says Philip Stuart, Tomah Memorial’s CEO, who adds that 50 colonoscopies are performed each month at his facility.
In 1999, the hospital invested $1 million in clinical and financial information systems from Healthcare Management Systems, Nashville, allowing the hospital to become more efficient.
Brim Healthcare, Brentwood, Tenn., manages Tomah Memorial.
Patient safety first
Named to the list in the small hospital category, 66-bed OSF St. Francis Hospital in Escanaba, Mich., has made improvements in clinical quality a specific target. Hospital managers believe quality gains lead to productivity gains, which show up on the bottom line.
St. Francis embarked on a patient-safety initiative 21/2 years ago in collaboration with the other hospitals in the six-hospital OSF Healthcare System, based in Peoria, Ill. The first step: St. Francis standardized the processes involved in ordering and administering medications. The hospital zeroed in on drugs at high risk for medication errors, such as anticoagulants, which need to be closely monitored to prevent the drugs from thinning the blood too much. Based on a review of medical literature, the hospital established guidelines for how much of the medication to give and how often to give it, as well as for what tests to order and how often to order them.
“The reduction in variations has improved patient safety,” says Ron Bissett, director of quality improvement and patient safety at St. Francis. The hospital’s medication error rate-or adverse drug-event rate-is 11/2
to 2 incidents per 1,000 doses in 2004, compared with 3 to 31/2 incidents per 1,000 doses in 2001.
The emphasis on patient care has led to improved financial performance, leading to a smaller loss in 2003 compared with 1999. St. Francis generated an operating loss of $1.2 million in 1999, or a negative 3.1% margin, on revenue of $39.6 million, compared with a loss of $960,000, or a negative 1.9% margin, on revenue of $50.1 million in 2003.
To further improve quality, productivity and the bottom line, St. Francis went live on Oct. 1, 2003, with Carecast, a clinical, finan- cial and administrative information system from IDX Systems Corp.
The investment-which is shared with hospitals within the OSF Healthcare System-is substantial. St. Francis logged $3.6 million in capital expenses and $575,000 in operating expenses to prepare for the launch.
“We want to have good, credible data that can be applied to decisionmaking,” says Peter Jennings, who became administrator of St. Francis on Jan. 1, replacing Roger Burgess, who retired.
It’s that dedication to continuous improvement that sets the “Most-Improved” hospitals apart from their peers. Says Solucient’s Chenoweth, “They have been able to install a culture dedicated to performance improvement across all key management areas.”
Linda Wilson, a former Modern Healthcare reporter, is a freelance writer based in McHenry, Ill. She can be reached at lindajwilson@comcast.net
For additional charts on Solucient’s inaugural “100 Most-Improved Hospitals” list, visit the Surveys/Lists/Data section of modernhealthcare.com