4 Characteristics of Poorly Performing Hospitals

Hospitals that are forced to close their doors often have similar characteristics, according to the Medicare Payment Advisory Commission's annual report to Congress.

MedPAC outlined four common traits of poorly performing hospitals, many of which consequently have weak financial metrics.

1. Low occupancy rate. Hospitals that closed in 2012 had an average occupancy rate of 27 percent in 2011. Compare that to their nearby competing hospitals, which had an average occupancy rate of 57 percent. If a hospital's occupancy rate for staffed beds falls below 50 percent, MedPAC analysts said it usually leads to poor financial performance.  

2. High readmissions. MedPAC found hospitals that closed or were on the brink of closure had risk-adjusted, hospitalwide readmission rates in the worst 10 percent.

3. Poor patient satisfaction scores. Poorly performing hospitals, according to MedPAC, had unfavorable HCAHPS scores, which measure patient satisfaction. For example, high numbers of patients rate the hospital a "6" or lower on the 10-point scale. In addition, few patients would recommend the hospital to other family members and friends.

4. Urban/rural specifics. MedPAC identified 112 hospitals with a combination of low occupancy, high readmission rates and low patient satisfaction scores. The group broke down the poor-performing hospitals by population area.

•    Urban poor-performing hospitals. These hospitals had an average of 138 beds, posted an average daily census of 50 patients, are predominantly for-profit and are often situated less than five miles from another hospital. MedPAC said Chicago, Los Angeles and Miami all have multiple poor-performing hospitals.

•    Rural poor-performing hospitals. These hospitals have an average of 78 beds, posted an average daily census of 23 patients and are often at least 25 miles away from the next-closest hospital. Alabama, Arkansas, Louisiana, Mississippi, Oklahoma, Tennessee and Texas are among the states with the most low-performing rural hospitals, according to MedPAC.

More Articles on Hospital Finance:
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