Using performance data to identify preferred hospitals.
OBJECTIVE
To explore the implications of current approaches used by health plans and purchasers to identify preferred hospitals for tiered networks using cost and quality information.


METHODS
2002 secondary data from WebMD Quality Services on hospital quality and costs in five markets (Boston, Miami, Phoenix, Seattle, and Syracuse).


METHODS
We compared four alternative tiering strategies that combine information on quality and cost to designate "preferred" (defined as ranking in the top quartile) hospitals. Within each market we identified the sets of hospitals designated preferred according to each strategy and examined the overlap in these sets across strategies.


RESULTS
Compared with identifying preferred hospitals based on quality scores only, we found little overlap with the sets of hospitals that would be preferred based on cost scores only, cost scores after applying minimal quality standards, and an equally weighted quality and cost measure. The last two approaches, commonly used and intuitively appealing strategies to identify high-value hospitals, led to substantially different results.


CONCLUSIONS
The lack of agreement among alternative strategies to combine cost and quality data for ranking hospitals suggests the need for clear prioritization by payers and the application of more rigorous methods to identify high-value hospitals.
Rosenthal
Meredith B
MB
Department of Health Policy and Management, Harvard School of Public Health, 677 Huntington Avenue, Room 405, Boston, MA 02115, USA.
Landrum
Mary Beth
MB
Meara
Ellen
E
Huskamp
Haiden A
HA
Conti
Rena M
RM
Keating
Nancy L
NL
D003661:Decision Support Techniques; D017598:Efficiency, Organizational / Q000191:economics; D006302:Health Services Research / Q000379:methods; D017721:Hospital Costs / Q000145:classification* / Q000706:statistics & numerical data; D006761:Hospitals / Q000145:classification / Q000592:standards*; D006801:Humans; D011243:Preferred Provider Organizations / Q000191:economics / Q000592:standards*; D011785:Quality Assurance, Health Care / Q000379:methods*; D019984:Quality Indicators, Health Care / Q000145:classification* / Q000706:statistics & numerical data; D012017:Referral and Consultation / Q000191:economics / Q000592:standards; D012680:Sensitivity and Specificity; D014481:United States