Local Market Comparisons vs. The National Rate

Top 10 US Markets…and your city too!

Hospitals often track their own performance against a national rate as found in Hospital Compare, but what about the local market rate and trends?

It’s important to be watching trends, not just for your facility, but for everyone in the local market. And not just versus those you think are like you, but those consumers will choose between in your market.

The National Rate for important metrics like Hospital wide 30-day readmission rates doesn’t tell you enough to take targeted and local action. See the Boston vs. Los Angeles comparison below.

Tracking trends by local peer group or institutional characteristic delivers a better, faster and smarter analytic to answer key questions such as:

• Who’s the break-away competitor and where do they excel?
• Is the hospital-wide score supported by improvements across: AMI, CABG, COPD, HF, Hip/Knee and PN?
• How many acute care excess patient days are the result of these rates?
• Who among market peers are making the most progress on rates and reduction in excess patient days, and for which services?
• Does performance translate into reduced Medicare spending per discharge?
• Is your trend consistent with the local trend and that of national rate?

Comparison Discussion Findings: The National Rate for Hospital-wide, 30-day Readmission Rate is 15.3%. Due to the national scale of the Readmission rate, a very small variance can result in a reimbursement variance of up to 3.0% of a hospital’s FFS Medicare base operating DRG payment.

The Adjustment Factor, the Readmission Rate, the Payment Adjustment % and Excess Patient Days can each be found in Franklin:BI.

The median value for the Los Angeles market (27 hospitals within 10-mile radius of Cedars Sinai) is 15.85% trending down from 15.9%. While this looks to be a small change, this would result in a reduction in Medicare FFS operating DRG payments if the local market trends were consistent with national performance. The target hospital’s performance yielded a 0.18% reduction, but as noted below, Pacific Alliance Medical Center had better results and Providence St. Joseph reported worse results with an unfavorable upward trend. 

The median value for the Boston market (16 hospitals within 10-mile radius of Massachusetts General Hospital) is 15.9%, trending down from 16.1%. This would result in a reduction in Medicare FFS operating DRG payments if the local market trends were consistent with national performance. The target hospital’s performance yielded a 0.52% reduction, and as noted below, New England Baptist had the best performance with a favorable downward trend and Tufts Medical Center reported the worst with an unfavorable upward trend.

Want to see more about your own local markets? Franklin:BI has every US hospital and every US market with trends across all quality, safety, clinical, operational and financial metrics. Let us help your business analysts today.