Surgical care improvement linked to hospital financial performance

Reviewed by James Ives, M.Psych. (Editor)May 16 2019

Hospitals that perform better on steps to prevent complications after surgery also have better performance on measures of profitability, reports a study in the May/June issue of the Journal of Healthcare Management, an official publication of the American College of Healthcare Executives (ACHE). The journal is published in the Lippincott portfolio by Wolters Kluwer.

Our findings suggest targeted improvement in patient safety performance…is associated with improved financial performance at the hospital level. Increased attention to safe care delivery may allow hospitals to generate additional patent care earnings, improve margins, and create additional capital to advance hospital financial position."

Brad Beauvais, PhD, FACHE, of Texas State University, San Marcos, and colleagues

Hospital Financial Health Improves with Steps to Make Surgery Safer

The study focused on the association between patient safety performance data and hospital profitability. The safety data included seven indicators of the quality of surgical care, as defined by the Surgical Care Improvement Project (SCIP) – an ongoing, nationwide effort to prevent common postoperative complications.

The analysis included data from between 1,000 and 3,000 US hospitals, depending on the SCIP measure evaluated, for 2014-15. Two measures of the hospitals' financial "bottom line" were analyzed: operating margin and net patient revenue.

In general, hospitals that performed better on safety indicators also had better financial performance. Improved safety performance was linked to higher net patient revenue for five of the seven SCIP measures, including starting and stopping preventive antibiotics and steps to reduce the rates of cardiac events and blood clot-related complications. For all seven SCIP markers, better safety performance was linked to a higher operating margin.

For example, hospitals that consistently started preventive antibiotics within one hour before surgery were 17 times more likely to be in the highest category for net patient revenue and 20 times more likely to be in the highest ranking for operating margin, compared to lower-performing hospitals and after controlling for numerous unique organizational factors. "Our results explained a very large portion of the variance in net patient revenue but were much weaker for operating margin," Dr. Beauvais comments.

Hospitals face increasing pressure to increase patient safety and improve outcomes, including "pay for performance" programs tying reimbursement to care quality indicators. While debate continues over the effectiveness of these programs, until now few studies have focused on how efforts to improve patient safety are related to hospital profitability.

The new study is among the first to show a "focused association" between patient safety measures and hospital financial performance. "In essence, we are suggesting that improved patient safety performance can be its own reward," Dr. Beauvais and coauthors write.

While more research is needed, the study provides initial evidence that improving patient safety performance can contribute to organizational financial performance, Dr. Beauvais and colleagues believe. They conclude, "Specific areas where improvement can yield optimal financial return is worthy of additional scrutiny as financial pressures on hospitals continue to increase."

Source:

Wolters Kluwer Health

Journal reference:

Beauvais,B. et al. (2019) Does Patient Safety Pay? Evaluating the Association Between Surgical Care Improvement Project Performance and Hospital Profitability. Journal of Healthcare Management. doi.org/10.1097/JHM-D-17-00208