Measuring comparative hospital performance.

Leading healthcare provider organizations now use a "balanced scorecard" of performance measures, expanding information reviewed at the governance level to include financial, customer, and internal performance information, as well as providing an opportunity to learn and grow to provide better strategic guidance. The approach, successfully used by other industries, uses competitor data and benchmarks to identify opportunities for improved mission achievement. This article evaluates one set of nine multidimensional hospital performance measures derived from Medicare reports (cash flow, asset turnover, mortality, complications, length of inpatient stay, cost per case, occupancy, change in occupancy, and percent of revenue from outpatient care). The study examines the content validity, reliability and sensitivity, validity of comparison, and independence and concludes that seven of the nine measures (all but the two occupancy measures) represent a potentially useful set for evaluating most U.S. hospitals. This set reflects correctable differences in performance between hospitals serving similar populations, that is, the measures reflect relative performance and identify opportunities to make the organization more successful.