Association of Measured Quality and Future Financial Performance Among Hospitals Performing Cardiac Surgery.

GOAL: For decades, hospitals performing cardiac surgery have carried the cost of implementing quality improvement activities and reporting quality outcomes. However, the financial return of such investments is unclear, which weakens the incentive for hospitals to invest in quality improvement activities. This study explored the relationship between a hospital's measured quality and its financial performance. METHODS: Using data from the American Hospital Association and Hospital Compare from 2014 to 2018, we performed an observational study of hospitals performing cardiac surgery. We used mixed-effects regression models with fixed-year effects and random intercepts to explore associations between measured quality and hospital financial performance. Our dependent variables were margins (profit divided by revenue) and financial distress; our independent variables included Patient Safety Indicator 90 (PSI-90) and hospital characteristics. PRINCIPAL FINDINGS: Our sample included 4,927 hospital-years from 1,209 unique hospitals. Hospitals in the worst-performing PSI-90 score quartile experienced a lower operating margin (-1.26%, 95% CI [-2.10 to -0.41], p = .004), a lower total margin (-0.92%, 95% CI [-1.66 to -0.17], p = .016), and an increased odds of financial distress in the next year (OR: 2.12, 95% CI [1.36-3.30], p = .001) when compared with the best-performing hospitals. PRACTICAL APPLICATIONS: Our exploration into financial distress provides managers with a better understanding of the relationship between a hospital's measured quality and its financial position. In reflecting on our findings, hospital leaders may consider viewing patient safety as a modifiable factor that can improve their organization's overall financial health. Our findings suggest that excellent safety performance may be both financially and clinically beneficial to hospitals.

Predictors of Financial Distress Among Private U.S. Hospitals.

BACKGROUND: Hospitals are closing after poor financial performance leaving many patients without access to medical care. Identifying the factors associated with financial distress offers hospitals avenues for potential intervention to avoid bankruptcy and closure. MATERIALS AND METHODS: We performed a retrospective analysis of private U.S. hospitals' financial information from 2011 to 2018. A mixed effects logistic regression model was used with the primary outcome of hospital financial distress (based on the Altman Z-score). RESULTS: Our sample included 2,720 private hospitals contributing a total of 20,022 hospital-year observations. The proportion of hospitals experiencing financial distress each year ranged from 22.0% to 24.3%. For-profit status was associated with an increased odds of financial distress (adjusted odds ratio (aOR), 4.36 [95% Confidence Interval (CI) 3.05 - 6.24]) as compared to non-profit status. A higher share of hospital revenue from Medicaid was also associated with increased odds of financial distress (aOR for the highest quartile, 2.28 [95% CI 1.73 - 3.00]) as compared to the lowest quartile. A higher case mix index (aOR for the highest quartile, 0.32 [95% CI 0.23 - 0.46]) and an increased share of hospital revenue from outpatient services (aOR for the highest quartile, 0.34 [95% CI 0.23 - 0.49]) were associated with decreased odds of financial distress as compared to their respective lowest quartiles. CONCLUSIONS: A significant proportion of private U.S. hospitals experience financial distress. Increasing case complexity and the proportion of patient revenue from outpatient services may represent avenues to avoid financial distress.

Association of measured quality with financial health among U.S. hospitals.

BACKGROUND: High-quality care is a clear objective for hospital leaders, but hospitals must balance investing in quality with financial stability. Poor hospital financial health can precipitate closure, limiting patients' access to care. Whether hospital quality is associated with financial health remains poorly understood. The objective of this study was to compare financial performance at high-quality and low-quality hospitals. METHODS: We performed a retrospective observational cohort study of U.S. hospitals using the American Hospital Association and Hospital Compare datasets for years 2013 to 2018. We used multilevel mixed-effects linear and logistic regression models with fixed year effects and random intercepts for hospitals to identify associations between hospitals' measured quality outcomes-30-day hospital-wide readmission rate and the patient safety indicator-90 (PSI-90)-and their financial margins and risk of financial distress in the same year and the subsequent year. Our sample included 20,919 observations from 4,331 unique hospitals. RESULTS: In 2018, the median 30-day readmission rate was 15.2 (interquartile range [IQR] 14.8-15.6), the median PSI-90 score was 0.96 (IQR 0.89-1.07), the median operating margin was -1.8 (IQR -9.7-5.9), and 750 (22.7%) hospitals experienced financial distress. Hospitals in the best quintile of readmission rates experienced higher operating margins (+0.95%, 95% CI [0.51-1.39], p < .001) and lower odds of distress (odds ratio [OR] 0.56, 95% CI [0.45-0.70], p < .001) in the same year as compared to hospitals in the worst quintile. Hospitals in the best quintile of PSI-90 had higher operating margins (+0.62%, 95% CI [0.17-1.08], p = .007) and lower odds of financial distress (OR 0.70, 95% CI [0.55-0.89], p = .003) as compared to hospitals in the worst quintile. The results were qualitatively similar for the same-year and lag-year analyses. CONCLUSION: Hospitals that deliver high-quality outcomes may experience superior financial performance compared to hospitals with poor-quality outcomes.