The Pennsylvania Health Care Cost Containment Council (PHC4) was established as an independent state agency by the General Assembly and the Governor of the Commonwealth of Pennsylvania in 1986. To help improve the quality and restrain the cost of health care, PHC4 promotes health care competition through the collection, analysis and public dissemination of uniform cost and quality-related information. Thanks to the vision of its General Assembly, Pennsylvania has begun to build a new health care marketplace where purchasers, consumers, providers, payors, and policy makers can make more informed decisions about the delivery of health care. This Hospital Performance Report is one of a series of public reports designed to achieve this goal. Information about additional treatment and surgical categories is posted on the PHC4 website at http://www.phc4.org.
Before we make a major purchase, we normally familiarize ourselves with as much information as we can gather about the available products or services. By comparing what we can learn about the quality of the product as well as what will be charged for it, we decide on what we believe is the best quality product for the best possible price. It should be the same with health care services. Unfortunately, the information available to consumers and purchasers to make such decisions is limited and often not widely accessible. PHC4's Hospital Performance Report can help to fill that vacuum of information and assist consumers and purchasers in making more informed health care decisions. This report can also serve as an aid to providers in highlighting additional opportunities for quality improvement and cost containment. It should not be used in emergency situations.
Clinical Conditions - This report now includes 29 conditions based on ICD-9-CM (International Classification of Diseases, Ninth Revision, Clinical Modification) codes, which specify the clinical reason(s) for a patient's hospitalization. Of the 29 code-based conditions, there are 19 diagnoses and 10 procedures. Descriptions of these conditions are on pages 8 and 9.
Pennsylvania hospitals are required by law to submit certain information to PHC4. The data compiled for the purpose of this publication is reported as it was submitted to PHC4 by Pennsylvania hospitals. The data was subject to standard verification processes by PHC4. In addition, hospitals are required to submit data indicating in simple terms "how sick the patient was" or, in technical jargon, a "severity score." The data is then risk-adjusted.
Even though two patients may be admitted to the hospital with the same illness, there may be differences in the seriousness of their conditions. In order to report fair comparisons among hospitals, PHC4 uses a complex mathematical formula to "risk-adjust" the mortality, length of stay and readmission data, meaning that hospitals receive "extra credit" for treating patients that are more seriously ill or at a greater risk than others. Risk-adjusting the data is important because sicker patients may be more likely to die, stay in the hospital longer, or be readmitted.
A sophisticated patient risk classification system called Atlas Outcomes™ is used to collect clinical information about hospital patients and to predict each patient's chance of mortality and expected length of stay. Atlas Outcomes™ is a clinical information system developed by MediQual Systems, Inc., a business of Cardinal Health. This system is based on electronically available admit/discharge/transfer and laboratory data, as well as selected clinical data abstracted from the patient record including EKG readings, vital signs, medical history, imaging, pathology and operative results. PHC4 also independently adjusts for other risk factors such as poverty rate or the presence of cancer in the patient population included in this report.
A comprehensive description of the risk-adjustment techniques used for this report can be found in the Technical Notes on PHC4's website at http://www.phc4.org.
PHC4's mission is to provide the public with information that will help to improve the quality of health care services while also providing opportunities to restrain costs. The measurement of quality in health care is not an exact science. There may be a number of ways to define quality; however, for the purposes of this report, six measures are suggested. With the exception of volume of cases, each of these measures has been adjusted for patient risk. (For more information, see the previous section entitled, Accounting for high-risk patients.)
This report also includes the average hospital charge for each of the 29 code-based conditions. While charges are what the hospital reports on the billing form, they may not accurately represent the amount a hospital receives in payment for the services it delivers. Hospitals usually receive less in actual payments than the listed charge. However, charges are the only data compiled that reflect the relative cost of all services provided by hospitals. Consequently, hospital charges are used almost universally by those attempting to assess the costs of health care.
A look at the financial data submitted by hospitals to PHC4 can shed some light on the relationship between the amount hospitals charge or bill for services, and the amount they receive in Net Patient Revenue (NPR). According to PHC4's Hospital Financial Analysis 2003, Volume One, Pennsylvania hospitals received, on average statewide, $.30 in NPR for every dollar that they charged in PA Fiscal Year 2003 (7/1/02 through 6/30/03).
Within the geographic area covered in this report, hospitals received, on average, $.46 in NPR for every dollar charged. Broken down even further, hospitals within Northcentral Pennsylvania received, on average, $.45 in NPR for every dollar charged, Southcentral Pennsylvania hospitals received an average of $.51 on the dollar, and hospitals in Northeastern Pennsylvania received an average of $.38 on the dollar.
Within the geographic area covered in this report, hospitals received, on average, $.24 in NPR for every dollar charged. Broken down even further, hospitals within the city of Philadelphia received, on average, $.23 in NPR for every dollar charged, suburban Philadelphia hospitals received an average of $.21 on the dollar, and hospitals in the Lehigh Valley/Reading area received an average of $.47 on the dollar.
Within the geographic area covered in this report, hospitals received, on average, $.36 in NPR for every dollar charged. Broken down even further, hospitals within Southwestern Pennsylvania received, on average, $.35 in NPR for every dollar charged, Northwestern Pennsylvania hospitals received an average of $.39 on the dollar, and hospitals in the Southern Allegheny regions (Somerset, Johnstown, Altoona areas) received an average of $.41 on the dollar.
These regional figures are aggregate only and cannot be applied to individual hospitals or individual average charges for conditions to calculate actual payment figures. This is due to substantial variation in hospital charges from hospital to hospital and from insurance product line to product line. There is also substantial variation in actual payments that hospitals receive for specific services. Actual payments to hospitals are imposed by Medicare and Medicaid, or result from negotiations with insurance companies, other third-party payors, and even individual patients.
All of the previously mentioned groups can use this information to raise important questions about why differences exist in the quality and efficiency of care.
This report can be used as a tool. It should not be used to generalize about the overall quality of care at a hospital, but instead to examine hospital performance in specific treatment categories. The measurement of quality is highly complex, and the information used to capture such measures is limited. A hospital death is frequently an unavoidable consequence of a patient's medical condition. Hospitals and physicians may do everything right and the patient can still die. However, the statistical methods used eliminate many of the clinical and medical differences among the patients in different hospitals, thereby allowing us to explore the real differences in the measures presented in this report. The pursuit of these issues can play an important and constructive role in raising the quality while restraining the cost of health care in the Commonwealth of Pennsylvania.
Hospitals are required under Pennsylvania law (Act 14) to submit timely, accurate health care data to PHC4. PHC4, acting upon the advice of its Technical Advisory Group, a panel of physicians and other health care experts, has determined that hospitals missing the required UB-92 data or patient severity scores in excess of or equal to 10% overall are non-compliant with state law and are excluded from this report. These hospitals are listed below. Although hospitalization data specific to non-compliant hospitals is not shown in this report, these records have been included in the overall analysis for the measures included in this report, and thus are reflected in the statewide and regional totals.
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