18 Healthcare KPIs to Measure Hospital Performance

In this article, we will look into 18 healthcare KPIs to measure hospital performance.

The hospital environment is one of the most demanding and dynamic environments in any industry.

Patients coming and going, life and death situations, nurses rushing through the halls and corridors, long lines of people waiting to receive critical services, and many other scenarios are very typical in the day-to-day environment of any hospital.

This makes measuring the performance of the hospital, its departments, its personnel and its operations a matter of extreme importance, to ensure quality medical care, good patient service and minimal mistakes.

Without further discussion, let us start with the Key Performance Indicators.

1- Average Length of Stay

Length of Stay (LOS) refers to the number of days a patient spends in a hospital. One common calculation is as follows:

LOS = Discharge Date — Admission Date

LOS as a metric allows hospital management to evaluate how efficient their medical care system is. It is directly related to costs, and a high length of stay is an alert to implement improvements in the system to lower costs while providing the same quality of medical services.

There are many dimensions to measure Average LOS on, but the most common ones would be the Average LOS per disease family, and the average LOS per admission category (Inpatient, Ambulatory, …etc).

For data where each row represents a patient encounter, the formula is:

Average Length of Stay = SUM(Discharge Date — Admission Date)/COUNT(Patient Encounters)

If the hospital’s overall average length of stay falls somewhere between 2 and 3 days, it is considered a decently efficient healthcare provider and the LOS is a good benchmark.

Managing to reduce the average LOS by 1–2 days can result in cost reductions up to 7%. Moreover, long stays lead to beds being occupied for prolonged periods of time and patients waiting for long.

2- Average Cost of Care per Patient

Cost of care represents the total cost incurred by the hospital for providing the services and items used in medical treatment.

Cost of Care = Sum(costs incurred for providing medical treatment)

Consequently, Average Cost of Care per Patient Encounter would be the cost incurred by the hospital to provide treatment for a patient when they visit.

3-Cost-to-Charge Ratio

Cost-to-Charge Ratio is basically how much the costs incurred represent out of how much the hospital has charged.

Cost-to-Charge Ratio = Costs / Charges

It allows for comparing how much the hospital has incurred compared to how much it charged, detecting cases of financial loss and estimating some costs (by multiplying the charges to the cost-to-charge ratio).

4- Jumbo Encounters

Jumbo encounters are the encounters that have very high charges. They are the outliers that resulted in huge bills for the payer.

Tracking these serves the purpose of detecting high costs incurred by the hospital and high charges incurred by the payer, and ensuring they are not this high because of a mistake or suspicious act.

5- Readmission Rate per Doctor

Readmission is the case when a patient was admitted to the hospital, and then gets re-admitted within 31 days.

This is important to track because readmission signifies potential low-quality medical care, or complications, that lead the patient to return to the hospital.

6- Claims Denial Rate

Claims created for patients having health insurance are an interesting aspect you would want to track.

Why?

Because for each claim the hospital claims a certain amount to be paid by the payer (the insurance company), and the payer studies the request to accept to pay completely, accept to pay partially or reject to pay.

The rejection might be due to a number of reasons, one of which is because the claim does not comply with medical necessity rules or is missing certain documents.

Claims Denial Rate = Count(Denied Claims) / Count(All Claims)

Calculating the claims denial rate helps the management to determine how much of the claims are being denied and why.

7- Mortality Rate

Mortality refers to the number of deaths that occur amongst patients.

Mortality Rate = Count(deaths amongst admitted patients during a certain time period) / Count(all admitted patients during the same time period)

A high mortality rate is an alert to investigate the cause of high deaths among admitted patients.

8- Total Hospital-Acquired Conditions

Hospital-acquired conditions are those conditions that the patient acquires during their stay at the hospital. They cover a range of mistakes, complications to already existing problems, and other health conditions.

A high number of hospital acquired conditions might be a sign of low-quality medical care, and that management needs to resolve certain issues or some staff members need to do a better job.

The Center for Medicare and Medicaid Services (CMS) provides a comprehensive list of ICD codes which are hospital-acquired conditions. You can check it here.

Your healthcare organization can use this list to detect and investigate the hospital acquired conditions in your patient health records, and use them to improve the quality of medical care.

9- Average Patient Wait Time per Department

Patients come to the hospital both for life-or-death situations or for critical need for medical care. This makes patient waiting time a very important metric to track. The hospital should always strive for lower wait times as these are both dangerous and inconvenient for patients.

Average Patient Wait Time = Sum(Wait Time of All Patients) / Count (All Patients)

10- Average Bed Occupancy Rate per Night

Bed Occupancy rate refers to how many of a hospital’s beds get occupied by patients on a given night. This is an important metric because it tell us whether expansion is needed (added more beds, more departments, …) or whether the hospital can take in more patients and grow further, given its current size.

To calculate the average bed occupancy rate, divide the number of patients served during a certain period of time, by the number of beds available during that same period.

Average Bed Occupancy Rate = Count(Patients Served During a Period of Time) / Count(Beds Available During the Same Period)

11- Ratio of Staff to Patients

The ratio of staff to patients measures how many patients each staff member serves at the hospital.

This metric can guide the management in optimizing the allocation of resources, maintaining enough staff available for critical cases and improving the overall quality of medical care.

Staff-to-Patient Ratio = Number of Staff Available in A Certain Time Period / Number of Patients Served During the Same Time Period

On the other hand, if staff-to-patient ratio is too high, it is a sign that costs should be decreased and management should be re-allocating staff to areas/departments that need more resources.

12- Percentage of Time of Full ER Utilization

This is one of the critical metrics that needs special attention.

The percentage of time of full ER utilization alerts the hospital management of full ER occupancy. This is dangerous as the ER serves critical situations. Thus, if it is fully occupied, it cannot take in critical urgent cases.

Percentage of Time of Full ER Utilization = Time When ER is Fully Utilized During a Certain Time Period / Total Time Period

13- Total Deaths Due to Mistakes

Deaths occurring in the hospital due to mistakes by the doctors, nurses or any other staff members should be closely investigated. The optimal situation is to have this metric at zero; thus anything more than that is a problem.

14- Percent Profits Out of Charges

A hospital is usually a business seeking a profit; or at least seeking not to operate while incurring losses.

Percent Profits Out of Charges measures the profit margin out of the charges collected. It tells how much in profit (positive value) or losses (negative value) the hospital is making.

% Profits Out of Charges = 100 * (Charges — Costs) / Charges

15- Patient Satisfaction

Patient satisfaction is the ultimate goal of a hospital. How satisfied the patients are with the services reflects both the quality of medical care and the success of the patient journey. Thus, it is an important KPI on this list of healthcare hospital KPIs.

Successful surgeries, accurate administration of medicine, low waiting times, minimal hospital-acquired conditions, … all lead to highly satisified patients.

This is usually measured using surveys. The typical scale is a 5-point rating of the overall patient experience, along with detailed questions addressing different areas. If we average these (weighted average is preferred) we get a score over 5, of patient satisfaction.

16- Ratio of Nurses to Doctors

Nurses and doctors work hand-in-hand across the healthcare organization. Measuring how many nurses there are for each doctor, tells the management how balanced the medical teams are, and thus how well they perform, especially in critical situations like surgeries and the ER.

Nurses-to-Doctors Ratio by Department = Number of Nurses in a Certain Department / Number of Doctors in the Same Department

17- Percentage of Uncovered Service Encounters

Out of the many patient encounters in the hospital, there is a part where the patient cannot be cared for because the service is unavailable in this hospital.

Keeping an eye on these cases is important. It will give insight into the extent to which the hospital is able to satisfy healthcare needs.

If the percentage is too high, management might consider planning for services that are in high demand and are still unavailable.

% of Uncovered Service Encounters = 100 * Encounters Where Service was Unavailable / Total Encounters

18- Percentage of Failed Surgeries

Failed Surgeries are a serious issue, whether they failed due to human error or due to complications.

This metric is an important quality indicator. Management ought to use it for assessing the quality of service in the Operating Rooms department.

This enables management to further investigate the failed surgeries and take steps leading to better medical quality in the future.

% of Failed Surgeries = 100 * Count(Failed Surgeries) / Count(All Surgeries)

We have looked into 18 healthcare KPIs to measure hospital performance. Hopefully, this article will help you determine suitable KPIs to measure the performance in a healthcare setting.

Originally published at https://house-of-analytics.com on August 15, 2020.