Hospital Performance Report 2001 - Understanding This Report


The Pennsylvania Health Care Cost Containment Council (PHC4) was established as an independent state agency by the General Assembly and Governor of the Commonwealth of Pennsylvania in 1986. To help improve the quality and restrain the cost of health care, PHC4 promotes health care competition through the collection, analysis and public dissemination of uniform cost and quality-related information. Thanks to the vision of its General Assembly, Pennsylvania has begun to build a new health care marketplace where purchasers, consumers, providers, payors, and policy makers can make more informed decisions about the delivery of health care. This Hospital Performance Report is one of a series of public reports designed to achieve this goal, and is based on a previous PHC4 report, the Hospital Effectiveness Report, published from 1989 through 1994. Information about additional treatment and surgical categories is posted on the PHC4 website at

What is the purpose of the report?

Before we make a major purchase, we normally familiarize ourselves with as much information as we can gather about the available products or services. By comparing what we can learn about the quality of the product as well as what will be charged for it, we decide on what we believe is the best quality product for the best possible price. It should be the same with health care services. Unfortunately, the information available to consumers and purchasers to make such decisions is limited and often not widely accessible. PHC4's Hospital Performance Report can help to fill that vacuum of information and assist consumers and purchasers in making more informed health care decisions. This report can also serve as an aid to providers in highlighting additional opportunities for quality improvement and cost containment. It should not be used in emergency situations.

What is new in this report?

New Clinical Conditions - Previous Hospital Performance Reports focused solely on Diagnosis Related Groups (DRGs). Twelve DRGs are included in this report. A Diagnosis Related Group (DRG) is an illness classification system adopted andmodified by the federal government for standard health care reporting and billing purposes by hospitals and insurance companies. The system groups similar medical conditions and surgical procedures into hundreds of illness categories, called DRGs, based on the patients' diagnoses and procedures.

In an effort to more precisely define clinical conditions, this report also includes 16 new conditions based on ICD-9-CM (International Classification of Diseases, Ninth Revision, Clinical Modification) codes, which specify the clinical reason(s) for a patient's hospitalization. Of the 16 code-based conditions, there are 7 diagnoses and 9 procedures. The addition of 16 code-based conditions enhances the ability of this report to compare patients that are most similar to each other clinically. Several of the conditions included in this report were previously included in the Hospital Performance Report as DRGs, but are now more clearly defined using ICD-9-CM codes. Descriptions of the code-based conditions and DRGs are on pages 10 and 11.

New Outcome Measures

This report also includes new outcome measures.

About This Report

Where does the data come from?

Pennsylvania hospitals are required by law to submit certain information to PHC4. The 2001 data compiled for the purpose of this publication is reported as it was submitted to PHC4 by Pennsylvania hospitals. The data was subject to standard verification processes by PHC4. In addition, hospitals are required to submit data indicating in simple terms "how sick the patient was" or, in technical jargon, a "severity score." The data is then risk-adjusted.

Accounting for high-risk patients

Even though two patients may be admitted to the hospital with the same illness, there may be differences in the seriousness of their conditions. In order to report fair comparisons among hospitals, PHC4 uses a complex mathematical formula to "risk-adjust" the data, meaning that hospitals receive "extra credit" for treating patients that are more seriously ill or at a greater risk than others. Risk-adjusting the data is important because sicker patients may be more likely to die, stay in the hospital longer, or be readmitted.

The hospitals use a sophisticated patient risk classification system, called Atlas OutcomesTM, to assign patients to an appropriate illness category. Illness categories range from a patient who is not very sick to a patient who is near death. The Atlas Outcomes ™ system was developed by MediQual Systems, Inc. ®, a company of Cardinal Health Information Companies, and is based on the examination of numerous Key Clinical Findings such as lab tests, EKG readings, vital signs, patient's medical history, imaging results, pathology, age, sex, and operative/endoscopy findings. PHC4 also independently adjusts for other risk factors such as the presence of cancer and/or diabetes in the patient population included in this report.

A comprehensive description of the risk-adjustment techniques used for this report can be found in the Technical Notes on PHC4's website at

What is measured in the report and why is it important?

PHC4's mission is to provide the public with information that will help to improve the quality of health care services while also providing opportunities to restrain costs. The measurement of quality in health care is not an exact science. There may be a number of ways to define quality; however, for the purposes of this report, six measures are suggested. (With the exception of volume of cases, each of these measures has been adjusted for patient risk. For more information, see the previous section entitled, Accounting for high-risk patients.)