A hospital-specific template for benchmarking its cost and quality.

OBJECTIVE Develop an improved method for auditing hospital cost and quality tailored to a specific hospital's patient population. DATA SOURCES/SETTING Medicare claims in general, gynecologic and urologic surgery, and orthopedics from Illinois, New York, and Texas between 2004 and 2006. STUDY DESIGN A template of 300 representative patients from a single index hospital was constructed and used to match 300 patients at 43 hospitals that had a minimum of 500 patients over a 3-year study period. DATA COLLECTION/EXTRACTION METHODS From each of 43 hospitals we chose 300 patients most resembling the template using multivariate matching. PRINCIPAL FINDINGS We found close matches on procedures and patient characteristics, far more balanced than would be expected in a randomized trial. There were little to no differences between the index hospital's template and the 43 hospitals on most patient characteristics yet large and significant differences in mortality, failure-to-rescue, and cost. CONCLUSION Matching can produce fair, directly standardized audits. From the perspective of the index hospital, "hospital-specific" template matching provides the fairness of direct standardization with the specific institutional relevance of indirect standardization. Using this approach, hospitals will be better able to examine their performance, and better determine why they are achieving the results they observe.

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