title: The development and evaluation of hospital performance measures for policy analysis.
abstract: The purpose of this study was to develop and evaluate hospital performance measures to include aspects of hospital behavior beyond the traditional use of hospital profit margins for policy analysis. A number of measures have been used in the literature that are purported to reflect a variety of hospital behaviors. The reliability and validity of these and new measures were assessed using descriptive statistics and factor analysis on a sample of hospitals for a 3-year period. The sample consisted of all hospitals for which there were Medicare Cost Report and balance sheet data during the federal fiscal years 1987 through 1989. Using a subset of three hospital groups, 33 measures were evaluated, from which five were selected to represent the critical aspects of hospital performance important for policy analysis. The measures are: TEM, a new technical efficiency measure using data envelopment analysis techniques; the current ratio, depicting short-term financial performance; the ratio of longterm debt-to-net fixed assets, representing long-term viability; total margin, portraying profitability; and Medicare margin, characterizing Medicare's contribution to hospital financial position. Each represents different aspects of hospital efficiency and financially viability.
authors.affiliation: Department of Health Services, University of Washington, Seattle 98195.
authors.forename: J L
authors.initials: JL
authors.lastname: Ehreth
mesh_terms: D002201:Capital Expenditures; D004469:Economics, Hospital / Q000592:standards / Q000706:statistics & numerical data*; D017598:Efficiency, Organizational / Q000191:economics*; D005069:Evaluation Studies as Topic; D005163:Factor Analysis, Statistical; D005375:Financial Audit / Q000379:methods* / Q000592:standards / Q000706:statistics & numerical data; D007349:Insurance, Health, Reimbursement; D006278:Medicare; D016134:Organizational Policy; D017063:Outcome Assessment, Health Care; D011050:Policy Making; D015203:Reproducibility of Results; D014481:United States