Gold Standard: Analyzing Iowa’s Top Performing Hospitals

Blog posted by Nancy Rehkamp (retired)

Over the past six months, a group of us at LarsonAllen have had an opportunity to work with the Iowa Hospital Association to analyze the top financial and quality performing hospitals in the state. That information was compiled in the Iowa Hospital Gold Standard Performance Report.

Let me start by saying that Iowa health care providers have distinguished themselves as high-quality providers, as measured by and published in health care cost and quality reports like the Commonwealth Fund’s 2009 Aiming Higher report. Iowa ranked second nationally across the five dimensions of health studied. This financial and quality benchmarking study summarizes the performance results of the “best of the best” in hospital services nationwide.

There were a number of remarkable findings in the Iowa Hospital Gold Standard Performance Report. First, despite being one of the lowest Medicare reimbursed states—seventh lowest in the United States—Iowa hospitals rank 10th nationally in operating margins according to Ingenix’s 2009 Almanac of Hospital Financial and Operating Indicators. Second, despite Iowa hospitals being the “best of the best,” those identified as “Gold Standard” (and there were 19 in the state) had two times the profitability and 1.5 times the debt capacity of peer hospitals’ median performance. They also had greater growth over the past four years and were investing significantly more in facilities, health information technology, and equipment. These same organizations demonstrate higher clinical performance and customer satisfaction as measured by Hospital Compare and Agency for Healthcare Research and Quality (AHRQ), and perform better on patient safety metrics as reported to the Iowa Healthcare Collaborative.

Additionally, we looked at Iowa hospitals that performed best in solely the quality metrics to determine how their financial performance compared to peer hospitals. Again, we found that these high-quality hospitals—as measured by clinical, patient satisfaction, and patient safety metrics—performed better financially than peers, but not as well as the top financial performers. Ultimately, Iowa hospitals demonstrate it is possible to be very successful financially as well as high quality. Read the full report, including quality performance data.

The variation in health care costs and quality have generated much discussion and some contend that places like Iowa do not reflect the patient populations served at a much greater cost in other regions of the country. Regardless of your beliefs about variation in health care costs and quality, learning more about how Iowa hospitals are able to achieve such “Gold Standard” performance might actually move us further toward reducing costs and improving quality than some of the current health care reform debate.

All Iowa hospitals, particularly those identified as top performers, should be applauded for their performance. We were pleased to be a part of this effort to demonstrate what factors influence low cost and high quality.