Do patient perceptions of quality relate to hospital financial performance?

Analysis confirms that patient perceptions of quality are associated with hospital financial performance. Multivariate analysis involving more than 15,000 patients discharged from 51 medical/surgical hospitals shows that discrete dimensions of hospital quality (i.e., medical and billing systems and discharge processes) explain approximately 17%-27% of the variation in financial measures such as hospital earnings, net revenue, and return on assets. The findings suggest that measurable improvements in patients' judgments of hospital quality might translate into better financial performance. The implications of these results and the limitations of the study are discussed.