Relationship between hospital financial performance and publicly reported outcomes

BACKGROUND: Hospitals that have robust financial performance may have improved publicly reported outcomes. OBJECTIVES: To assess the relationship between hospital financial performance and publicly reported outcomes of care, and to assess whether improved outcome metrics affect subsequent hospital financial performance. DESIGN: Observational cohort study. SETTING AND PATIENTS: Hospital financial data from the Office of Statewide Health Planning and Development in California in 2008 and 2012 were linked to data from the Centers for Medicare and Medicaid Services Hospital Compare website. MEASUREMENTS: Hospital financial performance was measured by net revenue by operations, operating margin, and total margin. Outcomes were 30-day risk-standardized mortality and readmission rates for acute myocardial infarction (AMI), congestive heart failure (CHF), and pneumonia (PNA). RESULTS: Among 279 hospitals, there was no consistent relationship between measures of financial performance in 2008 and publicly reported outcomes from 2008 to 2011 for AMI and PNA. However, improved hospital financial performance (by any of the 3 measures) was associated with a modest increase in CHF mortality rates (ie, 0.26% increase in CHF mortality rate for every 10% increase in operating margin [95% confidence interval: 0.07%-0.45%]). Conversely, there were no significant associations between outcomes from 2008 to 2011 and subsequent financial performance in 2012 (P > 0.05 for all). CONCLUSIONS: Robust financial performance is not associated with improved publicly reported outcomes for AMI, CHF, and PNA. Financial incentives in addition to public reporting, such as readmissions penalties, may help motivate hospitals with robust financial performance to further improve publicly reported outcomes. Reassuringly, improved mortality and readmission rates do not necessarily lead to loss of revenue. Journal of Hospital Medicine 2016;11:481–488.