Healthcare News & Insights

Best practices hospitals can take from top 15 health systems

180099875The nation’s top 15 health systems have been analyzed, and they all have something in common — a focus on creating strong financial structures and using best practices. 

Earlier this year, Truven Health Analytics released its sixth annual list of the top 15 health systems in the nation, reports Modern Healthcare.

The list determines the five best large, mid-sized and small health systems in the country by analyzing metrics from public data. Truven looked at the following quality measures:

  • death rates
  • complications
  • 30-day readmissions
  • lengths of stay
  • a patient-safety index, and
  • Hospital Consumer Assessment of Healthcare Providers and Systems scores.

As you might expect, the top performing systems outdid their competitors in nearly all areas. Especially when it comes to length of stay, which on average, was as much as 10% shorter.

But for the first time, the researchers also examined systems based on their financial standings.

Money matters

Using health systems’ audited financial statements, researchers calculated their operating margins, days of cash on hand and their long-term debt to capitalization ratio. They found there was a strong correlation between care and finances. The health systems who had the best care and patient perception also outdid their peers financially.

“Even though the 15 Top health systems were chosen based on quality and patient perception of care, the 15 systems also outperformed their peers financially on all three metrics,” Jean Chenoweth, Truven’s senior vice president of performance improvement told Modern Healthcare.

It can be assumed that those systems with better financial standing are better able to invest in improving quality of care — through the form of researching and implementing best practices to improve patient experiences and care.

And now that quality of care is being measured and scrutinized more frequently in the healthcare industry, health systems are seeing a much higher return on those investments.

Along that same line of thinking, Truven’s list seems to justify the value-based model being promoted and imposed on the industry by government agencies and insurers. At the very least, the list shows that quality of care and finances are tightly intertwined. As quality of care improves, expenses are lowered, allowing systems and CEOs to use that money to make other improvements and further perpetuate the cycle.

Or as one top health system CEO put it, “Better quality actually does result in lower costs because you do things right the first time.”

Keeping an eye on best practices

For example: That same health system began a program to improve care and lower costs through reducing surgical site-infections using a diversified team of physicians, equipment and technology experts and other staffers. The system set a reduction goal for the year, then researched and implemented best practices and was able to exceed their original goal and save $2.8 million in the process.

Another system used a balanced scorecard method to set targets for improving quality of care, staff engagement and productivity, and financial accountability. This method then helped them meet their quality-of-care goal, while also helping them meet their goal for reducing operating costs.

By using quality metrics to measure care, the system was able to improve its savings and then further invest in quality of care. This sort of strategic thinking was especially helpful for the small health systems, which need to be especially careful about using limited resources wisely.

Reason: Truven’s analysis showed that small systems are, in general, weaker financially due to limited resources. However, while the operating margins of the winning small systems that made Truven’s list were slimmer than those of the winning large systems, the smaller systems were also more leveraged than the large systems.

Finding the perfect balancing act between long-term debt and capital is tough for all healthcare systems, no matter what their size. It just takes determination and perseverance from the system as a whole.

Subscribe Today

Get the latest and greatest healthcare news and insights delivered to your inbox.