These cost-efficient hospitals get great outcomes for less
Affordability is the topic on everyone’s mind, as premiums and other out-of-pocket costs are skyrocketing. What can we learn from the most cost-efficient hospitals on the Lown Index?
The Lown Institute Hospitals Index measures how well hospitals perform on clinical outcomes, value of care, and health equity. Our cost efficiency metric, which includes sub-metrics for 30-day and 90-day cost efficiency, measures risk-standardized hospital mortality rates against risk-standardized cost for Medicare patients. See all of our metrics on the Lown Index website!
Top ten hospitals for 30-day cost efficiency
Here are the top ten acute care hospitals for 30-day cost efficiency on the Lown Index, meaning they had the lowest risk-standardized 30-day mortality per Medicare dollar spent.
- Davie Medical Center—Bermuda Run, NC
- Northwestern Medicine Lake Forest Hospital—Lake Forest, IL
- Brigham and Women’s Faulkner Hospital—Boston, MA
- Northwestern Memorial Hospital—Chicago, IL
- Kuakini Medical Center—Honolulu, HI
- Barnes-Jewish West County Hospital—Creve Coeur, MO
- UC Health Highlands Ranch Hospital— Highlands Ranch, CO
- Houston Methodist Hospital—Houston, TX
- MultiCare Covington Medical Center—Covington, WA
- Alta View Hospital—Sandy, UT
All of these hospitals had average risk-adjusted 30-day mortality rates under 7% and risk-adjusted payments under $16,000. For comparison, the average mortality rate for all acute care hospitals with this metric available was 9.5% and the average payment amount was about $17,500. Among the top ten hospitals, the lowest average mortality rate was 4.88% and the lowest average payment was $11,366 (not at the same hospital).
Measuring Cost Efficiency
The Lown Index cost efficiency metric measures the clinical outcomes hospitals achieve over the cost of care on the Medicare fee-for-service (FFS) population. Hospitals with the lowest mortality and the lowest costs received the best scores in cost efficiency. The source of clinical outcomes and cost are Medicare FFS claims for patients hospitalized in 2020 to 2022. Hospitalizations that were transfers, in which patients had Covid-19, or where the primary payer was not Medicare, were excluded.
Medicare costs were measured by finding the claim payment amount for all claims within 30 days of the hospital admission, including inpatient, outpatient, carrier, skilled nursing facility, home health agencies, durable medical equipment and hospice claims. Payments were standardized for hospital patient risk (the conditions that hospital patients have as well as the procedures they received), so that hospitals with sicker patients were not punished for spending more to treat them. Payments were also adjusted for Medicare’s regional cost differences.