Because outcomes are core to understanding value in healthcare, organizations must have sophisticated processes for measuring, analyzing, and modifying care delivery based on clinical outcomes. Numerous types of clinical outcomes are available for measurement, and each type has its own unique application and method for collection. Organizations must understand how each type of clinical outcome contributes to a successful value-based operation.

Administrative claims-based outcomes are clinical outcomes derived from bills, also known as claims, submitted by physicians and hospitals to private and public payers. Administrative claims databases hold millions of transactions between provider and patient. Consequently, claims-based data can be analyzed for large patient populations at relatively low costs.¹ For some clinical measures, claims data can be more accurate than chart reviews because it shows whether tests were ordered or prescriptions were filled. However, claims data can have limitations due to coding errors or inconsistencies; in addition, these data can only examine conditions for which the patient was treated and submitted a claim.² For example, a noncompliant patient with diabetes may have no claim history of the disease. Because of their representation of large populations and relatively low costs, the use of administrative claims data as a surrogate for clinical outcomes has increased in recent years.

Public and private payers interpret the quality of healthcare organizations by examining claims-based outcomes such as incidence of death, nonfatal complications, and hospital-acquired conditions (HACs). Measured by patient safety indicators (PSIs), HACs are viewed as costly expenditures representative of hospital quality. In an effort to reduce health care spending, the Centers for Medicare & Medicaid Services (CMS) through the Inpatient Prospective Payment System in
2008 refused to pay for several HACs.³ Encouraged by the reduction in the rates of HACs as a result of this program, CMS announced it would penalize the lowest-quartile health systems 1% of total reimbursements based on a composite rate known as PSI 90 and five high-cost HACs. The PSI 90 went into effect in 2015 and consists of 10 PSIs (including iatrogenic pneumothorax, in-hospital fall with hip fracture, and postoperative respiratory failure). The five high-cost HACs are Clostridium difficile infection, surgical site infection, catheter-associated urinary tract infection, central line-associated bloodstream infection, and methicillin-resistant Staphylococcus aureus bacteremia.⁴ Following this lead, private insurance companies also implemented ways to reduce costs by driving consumers away from high-cost, low-quality hospitals to low-cost, high-quality hospitals. For example, some employer-based insurance plans encourage employees to receive treatment at centers of excellence or high-value health care facilities, rather than visit innetwork hospitals. A 2019 survey showed 16% of firms with 50 or more workers were designated centers of excellence as part of employee health plans.⁵ Overall, entities such as Medicare, employers, and private insurers use claims-based data to favor higher performing organizations and penalize lower performing organizations.

Because of their ability to assess the cost and quality of health care provided, claims-based outcomes are playing increasingly significant roles in financial compensation and consumer decision-making. CMS uses claims-based quality data to assess reimbursements, whereas private insurers implement claimsbased data to design plans with financial incentives such as lower copays to drive customers to high-value providers. It is to the benefit of providers to understand metrics such as PSI 90 and the five high-cost HACs. These claimsbased metrics not only represent the quality of a healthcare organization to CMS and private insurers, but they also determine the compensation that a healthcare organization may or may not receive. To create a successful value-based organization, providers need to be aware of the metrics used to evaluate them and the influence that they have on their organization.

Each year, factors such as patient satisfaction, clinical outcomes, and quality of health care providers are analyzed and converted into scores used to compare and rank hospitals in order of best to worst performance. These scores and rankings are then disseminated to the public to guide decisions on where patients choose to receive care. The four main national ranking bodies are Quality Rating System, US News & World Report, Leapfrog, and Healthgrades.⁶ Although each rating system operates a little differently, these rankings systems possess the power to influence both consumer and payer behavior.

Arguably the most influential of the national ranking systems, the Quality Ratings are a five-star rating system to track the experience of Medicare beneficiaries with their health plans. These ratings are based on measures in three categories with Medical Care given the greatest weight: (1) Medical Care, (2) Member Experience, and (3) Plan Administration.⁷ Medicare patients use the Quality
Ratings as a way to compare and select health care plans and providers. CMS and private insurers also use these ratings to assign bonus payments, structure reimbursement rates, dole out penalties, and decide which health care provider organizations should receive contracts. Because of the wide influence of these ratings from consumer choice to reimbursement, organizations must be aware of their rating and aim for ways to improve quality and value.

According to a 2018 Deloitte survey, 39% of respondents considered reputation when choosing a physician, whereas almost 25% reported that they had used a quality rating when choosing a physician or hospital, an increase of 5% from a 2013 survey.⁸ US News & World Report aims to help consumer decision making by listing the top 50 hospitals in the United States and within 16 specialties. It also regionally ranks hospitals and provides scores (out of 100) for each hospital. It breaks down the scoring of hospitals into three categories: outcomes and experience; key programs, services, and staff; and professional recognition. Using Medicare data, it incorporates clinical outcomes such as 30-day survival, discharging patients to home, and patient experience via survey into the total hospital score.⁹

Led by the mission of increasing transparency in health care, Healthgrades, a popular consumer site for hospital and physician ratings, ranks America’s best 250, 100, and 50 hospitals. To determine these rankings, Healthgrades establishes an overall performance score based on in-hospital mortality, 30-day mortality, and influence of mortality and complication outcomes on overall performance.¹⁰ Leapfrog provides safety grades for more than 2,600 hospitals using both process/structural and outcome measures.¹¹ As the influence of national rankings expands and the demand for increased health care transparency grows, healthcare organizations must be aware of the evaluation criteria used for the rankings and of their rankings and scores on the various consumer-facing national ranking systems.

In a value-based healthcare system, there is an advantage to using comprehensive, user-friendly platforms that can synthesize and interpret data for real-time clinical decision making and improvement. These platforms extract data from electronic medical records and health information technology systems. These data, specifically termed electronic clinical quality measures (eCQMs), measure the value of care provided through indicators such as length of stay, readmissions, complications, cost per case, or cost per supplies.

These platforms and by extension, eCQMs, can be leveraged to improve value of care through comparison by service line, surgeon, or hospital. For example, these platforms allow a total joint arthroplasty service line to compare the cost of case by surgeon and examine cost drivers. This analysis might show that one surgeon is using more costly implants or supplies, thus driving up the total cost of that surgeon’s cases. Moreover, eCQMs can shed light on specific patient factors such as comorbidities or age that can increase readmissions or length of stay, so that hospitals and physicians can be more attuned when managing
specific patient populations. These platforms, if implemented correctly, have the potential to ease the burden of quality reporting and bolster quality improvement through increasing access to real-time information.

eCQMs are essential to the improvement of care and quality. For these measures to be justifiable in regard to use of resources needed to collect and analyze, eCQMs must be feasible to collect in an automated fashion, generate valid and reliable results, and demonstrate a benefit that outweighs costs.¹² Electronic health record-based automated quality measure reporting has the potential, if implemented correctly, to ease the burden of quality reporting while simultaneously increasing access to real-time information to bolster quality improvement.

The American College of Surgeons has indicated that surgical quality could not be improved if it could not be measured, which led to the creation of the National Surgical Quality Improvement Program (NSQIP) to help hospitals detect potentially preventable adverse events. As a national, outcomes-based registry, the American College of Surgeons NSQIP helps surgeons determine the quality of their surgical programs and measurable improvement in surgical outcomes. NSQIP is a 20% sample that tracks outcomes for randomly selected patients until 30 days after hospital admission. The program uses eCQMs rather than administrative or claims data. One study compared NSQIP data to administrative and claims data and found that NSQIP data identified 61% more adverse events, including 97% more surgical site infections.¹³ The tools, analyses, and reports provided by the American College of Surgeons NSQIP allow surgeons and hospitals to make informed decisions about improving care quality.

Although administrative and claims-based data are relatively easy to measure, they do not necessarily represent the most meaningful outcomes to patients.¹⁴ As providers place increasing focus on value, they must similarly focus on outcomes that matter most to patients. For instance, a healthy patient undergoing a total hip replacement will likely care more about postoperative pain and function outcomes and less so about 90-day mortality rates. Therefore, organizations must install processes and systems whereby patient-centered outcomes data can not only be collected but analyzed and acted on as well.