Bacon's Rebellion

Democracy Thrives in Sunlight

Hospital Rankings and Economic Development

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by

James A. Bacon
in ,

VCU Medical Center complex in downtown Richmond, a driver of the regional economy.
VCU Medical Center complex in downtown Richmond.

by James A. Bacon

U.S. News & World-Report has issued its 2015-2016 ranking of the nation’s “best hospitals,” and Virginia has four hospitals with at least one adult specialty receiving a “national” ranking. The online publishing company bills the ranking as a tool to help patients select hospitals that can best treat complex illnesses. But it also prompts questions about the role of hospitals as agents of economic development.

Hospitals are major employers and generators of economic activity in every community they serve. While some hospitals cater to local markets exclusively, some have such a reputation for excellence in certain specialty practices, from cancer to heart disease, that they draw patients from around the state, the nation or even the world. To the extent that a hospital draws patients from elsewhere, it can be said to be “exporting” services and making a contribution to local jobs and economic activity.

Thus, Massachusetts General, rated the best hospital this year, excels in everyone of the 16 specialties covered by U.S. News & World-Report and three pediatric specialties. The hospital employs 2,889 doctors, many of whom are highly compensated specialists, not to mention a host of nurses, technicians, administrators and others. Its reputation as one of the best research hospitals in the world brings in “thousands” of international patients — so many that the hospital maintains a dedicated “international patient center.” No wonder that Mass General is an anchor of the Boston regional economy.

Accepting the proposition that hospitals can be big contributors to regional economies over and above their contribution to public health, how do Virginia’s hospitals shake up? Here’s the score:

Virginia Commonwealth University Medical Center
National ranking in 3 adult specialties, one pediatric specialty
Doctors: 454

Sentara Norfolk General
National ranking in 2 adult specialties
Doctors: 694

Inova Fairfax
National ranking in 1 adult specialty, two pediatric specialties
Doctors: 1,689

University of Virginia Medical Center
National ranking in 1 adult specialty, 4 pediatric specialties
Doctors: 609

Sentara_Norfolk_General
Sentara Norfolk General Hospital

How significant are those rankings? That’s hard to say. There are nearly 5,000 hospitals across the United States. U.S. News & World-Report uses a methodology that combines metrics such as hospital volume and risk-adjusted survival rates for complex cases and supplements them with a physician survey of hospital reputations. To be awarded a “national” ranking, a hospital must score within the top 50. In other words, that puts VCU in the top 1% for three adult specialties and one pediatric specialty. The publication does not publish the numbers behind the scores, so there is no way to tell if VCU’s specialties rank No. 1 in the country or No. 50.

U.S. News and World-Report focuses on 16 adult specialties. With 50 hospitals recognized for each specialty, a total of 800 total hospital specialties are recognized. Only seven of those are located in Virginia. To put that in perspective, Virginia has 2.6% of the nation’s population, 3.3% of its GDP but only 0.9% of its nationally ranked hospital specialties.

These are very rough numbers that are undoubtedly subject to criticism. But they suggest to me that Virginia’s hospitals are an under-performing economic sector. If hospitals achieved a level of excellence commensurate with Virginia’s population and GDP, there would be far more centers of excellence in the state, along with more highly compensated doctors, nurses and technicians employed.

That’s not meant to be a put-down of Virginia’s hospitals. The ability to expertly handle highly complex medical cases does not tell us much about the ability to handle routine cases. It doesn’t tell us how much the hospitals charge for their services or whether they’re providing value for the dollar. It doesn’t mean that Virginia hospitals aren’t serving their community. What the numbers mean is that Virginia is missing out on an economic development opportunity to provide services outside the community.

What U.S. News & World-Report does not tell us, and I don’t know, is what it takes to become a national-class hospital. I suspect that it takes a long time to build a top oncology or heart program, so longevity is probably a requirement. It also helps to live in a community that can afford to pay the high salaries of top medical talent. And it probably helps to have wealthy philanthropists willing to endow new buildings, medical school professorships and R&D. Undoubtedly, there are other factors of which I am unaware. I think it would be interesting to know what the key drivers are, and whether building institutions known for their medical excellence is something that communities can influence through government policy and/or philanthropic endeavors.

Virginians still think of economic development either as big game hunting for corporate investments or venture capital-driven business creation. But economic development comes in many forms, and hospitals are one. It strikes me that this is an area that warrants more attention here in the Old Dominion.

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  1. Reed Fawell 3rd Avatar
    Reed Fawell 3rd

    I am surprised at virginia’s rather poor showing. As Jim’s article points out this is an important metric for growth and reputation. Imagine the lose to Maryland without its Johns Hopkins huge and highly successful medical complex centered there.

    1. Cville Resident Avatar
      Cville Resident

      The future is going to be interesting…..those 4 listed along with Carillion….are probably going to own the state’s health care within 5 years. The ACA is forcing consolidation of health care (doctors, facilities, research) into “health care systems”…..

      1. Reed Fawell 3rd Avatar
        Reed Fawell 3rd

        These mergers will have drama impact on people’s heath and their means to improve and maintain their health in many ways seen and unforeseen.

    2. Rowinguy Avatar
      Rowinguy

      Two of the top 40 (out of >4,000 assessed) hospitals for the provision of “common care” were Virginia hospitals: St. Mary’s in Richmond, and Sentara Williamsburg.

      Remember to get a score in the specialty survey a facility had to rank in the top 50 of that 4,000+ figure. I’d venture that some very fine care is provided by facilities outside that top 50 also. So, the showing by Virginia may not be as poor as the construction of this survey suggests. But, we don’t have a Johns Hopkins or a Mass General in the Commonwealth, I agree.

      1. Reed Fawell 3rd Avatar
        Reed Fawell 3rd

        Excellent points and I suspect that Virginia might well have a relatively large proportion of such fine hospitals that fall not so far beneath that line and or provide in many instances care equal or superior to those within the top fifty per the reports metrics.

      2. LarrytheG Avatar
        LarrytheG

        I got more curious about the phrase “common care”… and went looking:

        ” Working with Medicare data, the U.S. News team spent over a year analyzing more than 5 million patient records to assess outcomes at some 4,000 hospitals across the U.S. and its territories. Our findings, published today at http://health.usnews.com/best-hospitals, reveal both reassuring and troubling patterns.

        Users can see for themselves. The Best Hospitals for Common Care initiative allows anyone to look up any U.S. hospital’s performance in three common surgeries—hip replacement, knee replacement and heart bypass surgery—and two widespread chronic conditions—congestive heart failure and the lung ailment known as chronic obstructive pulmonary disease, or COPD. U.S. News assigned each hospital that treated enough patients up to five separate ratings, one for each procedure and condition.”

        The point I’d like to make – again – is that none of this would be possible without the Govt and Medicare.

        Over and over and over – in BR – we have the anti-govt boo birds yammering about how bad the govt is….

        or they blather about the free market or patient-centered healthcare or healthcare based on free-market principles…

        and none of it would be possible without the govt.

        no data would be released by any medical provider or any hospital if it were not for the govt.

        bu that don’t keep the anti-govt boo birds.. from yammering…

        1. Reed Fawell 3rd Avatar
          Reed Fawell 3rd

          Yet more thoughtless and nonsensical insults, the product of an infiertile and childlike mind.

  2. LarrytheG Avatar
    LarrytheG

    One of the metrics in the rankings is the number of ER visits per year. I took a look for Mary Washington in Fredericksburg and was surprised to see 89,151
    at a 437 bed hospital with 23,294 admissions.

    I don’t know how that compares… – might be interesting to know – but it boils down to over 200 ER visits per day and one admission for every 4 ER visits.

    The second thing to note – is WHERE much of their source data came from:

    ” Volume data are taken from the Medicare Provider Analysis and Review (MedPAR) database maintained by the Centers for Medicare & Medicaid Services (CMS). This database contains information on all fee-for-service Medicare beneficiaries who use hospital inpatient services”

    Give credit to US NEWS for doing a top-notch job with the data.

    but then give the US govt and Medicare credit for collecting the data that makes such analyses even possible.

    Give Medicare an additional credit – to encourage and incentivize electronic medical records – which is now being used to promote treatments that result in outcomes – not just reimbursed treatment.

    Finally – what we are seeing is the govt attempting to encourage managed care for people – i.e. doctors sharing records of those they treat.

    How many of you have visited a new doctor or specialist and been given the proverbial clipboard – where you are supposed to remember your own medical history? Medicare wants your doctor to be able to see your entire Medical History on a computer screen – no matter if that doctor is first seeing you or you are unconscious in an Emergency Room.

    You know – your bank or credit card company can easily keep detailed records of your financial history – 3 credit agencies, etc…

    and yet .. if you showed up one day at an ER – conked out – what would they be able to find out about you to help them to know about your medical status?

    Hospitals and doctors would not collect and keep this info and make it available others when needed.. but even if they did – it would not be in a standard format. It takes the govt to do this even as we have no end of critics.

    1. TooManyTaxes Avatar
      TooManyTaxes

      It’s often believed that it is appropriate for government to act where there is a market failure. The issue comes up often in the area of setting standards. Quite often, private standards bodies do the job and do it well. But in other cases, it may be appropriate for the government to set standards, especially where those standards bump into statutory rights, such as medical privacy rights. Electronic medical record standards need to be set such that they are compatible with HIPAA.

      But even there, there must be sufficient due process to enable interested parties the ability to influence the standards. It is wrong for any agency simply to announce new or revised standards, except in the case of absolute emergency. Laws like the Administrative Procedure Act and the Federal Advisory Committee Act should be followed as appropriate.

  3. Peter Galuszka Avatar
    Peter Galuszka

    Could be a lack of world class hospitals that draw non-locals. The effort to do that with and independent children’s hospital in richmond is faltering. VCU and Bon Secours oppose it.

    Could also be the certificate of need stuff, too.

  4. LarrytheG Avatar
    LarrytheG

    I’m pretty skeptical of the idea that most, the majority of hospitals draw in business beyond the MSA.

    Some will – major University or specialty hospitals but most hospitals serve the MSA..

    Even the ones that serve the MSA are substantial components of the economy… as is Medical Care in general.

    150 million people have employer-provided health insurance. Another 55 million have Medicare. The vast majority of these folks – spend at a local or regional hospital and medical providers.

    Yes there are some famous Hospitals.. that are the best in the world for their specialties Mayo, Cleveland, John Hopkins, MD Anderson, etc.

    In point of fact, most of the Hospitals in Va are urging the State to accept the Medicaid Expansion – as an economic benefit… but alas the folks in Richmond have other fish to fry.

  5. Reed Fawell 3rd Avatar
    Reed Fawell 3rd

    I suspect that in many times, places, and circumstances in which many patients find themselves, a merged system of a few great hospitals does, without intention, do more harm than good.

    Two examples – care delayed can unnecessarily kill a patient or grossly handicap her full recovery. And also greatly contract the availability of good care elsewhere.

    It’s all very complex, full of trade offs, unintended consequences, opportunities for greatness, and great possibilities for corruption while severely limiting competition and options for patients.

  6. LarrytheG Avatar
    LarrytheG

    I’d challenge anyone reading here who has gotten sick or ill to tell me how they decided who the most capable caregiver to go to … quickly to deal with the problem.

    for most folks – it boils down to not such as easy thing … if you are really sick -you go to the local ER .. and if you are not at the ER stage – you either go to the ones you have an established relationship with – or you call around trying to get a cold appointment with provider you’ve never been to.

    Even for the Mayo and Cleveland Clinics.. how do we really know they are the right place for us? Can we call and get an appointment ourselves or do we need a referral? Even if you have a referral.. can they take you within hours or days or are the appointments weeks and months off?

    So if you need a heart bypass – do you go to the hospital that ranks “very good” and an hour away or do you go 500, 1000 miles away to one that is a notch better?

    In the real world – when they take you to the ER and you need immediate surgery – are you going to dicker over price or insist that you want to be transferred to John Hopkins?

    I don’t say it won’t happen – it obviously does – John Hopkins has no trouble attracting business but probably 99% of most folks don’t have the time or money or patience to go to John Hopkins. More likely it’s a last resort desperation that drives folks from far away to go there.. and do what – stay in a hotel until you are well enough to return home for continuing care?

    and don’t get me wrong – If I have a condition that needs surgery – I want a guy or gal that does these surgeries A LOT – AND has a high survival rate!

    where can I get that info?

    To be honest – I don’t care what hospital they practice in…unless the hospital itself has a terrible record of post-operative care…

    sometimes you can tell from these conversations who has actually had a serious illness or injury in their life and who has not.

    the people who have not – are pretty much clueless about the realities and even more so if they are ideologues.

    1. TooManyTaxes Avatar
      TooManyTaxes

      Absent an emergency, a person needing surgery or specialized treatment will go to another doctor or facility recommended by his/her PCP. The latter will usually give the patient two or three names of doctors who accept the patient’s insurance or are in the network. Most people will do a little research or draw straws and pick one.

      On those occasions where I had been transferred from one city to another for business, I’ve asked neighbors, co-workers, etc. for recommendations. I’d check to see if they were in the network and pick one. Sometimes, I’d change, but most of the time this process worked OK. I’m still alive.

      1. Reed Fawell 3rd Avatar
        Reed Fawell 3rd

        Unfortunately my experience has not been so sanguine although I too am still alive fortunately.

  7. LarrytheG Avatar
    LarrytheG

    re: still alive…

    well you might be one of the lucky one’s, eh

    Here’s the deal. Conservatives spend a great deal of their time talking about how our current system fails to provide good quality at an affordable price – one that is competitive with other countries.

    that because our health care is so expensive that it will break the country because about 1/2 of our healthcare is provided via the govt.

    I too go by word of mouth…and I’ve started paying more attention to Doctors who are starting to use electronic records… If my entire financial life is on electronic records so can my health…

    everytime I go to a new doctor – I get handed a clipboard to fill out .. which serves as that Doctor’s medical history of me.

    This is ignorant. It’s stupid. Yet it is the system we currently have.

    when one doctor orders a test – he does not check to see if other doctors have ordered that test much less when… so he orders multiple tests.. already done… without even checking..

    How do I know? because the insurance companies won’t reimburse for some tests done too frequently…

    Medicare actually requires one to sign a waiver that acknowledges that they will not cover tests done too frequently…

    without blathering on and on – on this.. we have an ignorant system – on purpose – because Doctors actually don’t like or want efficiency if it costs them money out of their pocket.

    they get paid for what they do – not how well you do…

    the better they can write successful diagnostic and treatment codes – the more money they can make per patient.

    Why do we have this system? Because any involvement of govt goes high order for the Conservatives.. they continue to insist that we need less govt and more private sector… despite the fact that no place on earth works that way – except 3rd world. ALL OECD countries from German, to Japan, to Singapore, to Australia to Canada – have the govt involved.

    so in this country – we “check with friends” … for health care.

    oh and what little data we have comes from medicare

    1. TooManyTaxes Avatar
      TooManyTaxes

      Obama could have chosen to make the first step of health care reform, cutting costs. For example, legislation could have enabled Uncle Sam and insurance companies to reimburse drug prices at the lowest level sold in an OCED country. If $X is fine for France, it’s fine for the US too. We could have reasonable tort reform that would reduce unnecessary procedures & tests. We could have had a more aggressive policy against health care mergers.

      But Obama and his allies are always first motivated by trolling for votes by giving away something. And it avoided him being required to battle the status quo instead of making all sorts of sweetheart deals with segments of the health care industry and trial lawyers.

  8. LarrytheG Avatar
    LarrytheG

    Don’t blame Obama. He did what he thought was the right thing i.e. help those he had no insurance and who the rest of us pay for in the most expensive way possible. If you want to blame – blame the folks who don’t agree with him and had decades to do something different and did not and today do 50 repeals without a single REPLACE.

    Tort reform won’t fix anything. It’s a bogus excuse from those who have nothing else to offer, i.e. no REPLACE. Tort Reform is a state issue anyhow and is already a fact in many states including Va. It does not stop multiple tests.. and it does not stop medical providers from loading up as much as they can on diagnostic and treatment codes.

    TMT – it’s the height of hypocrisy to blame Obama and have no real competitive alternative …

    you’ve got these idiots saying – sell insurance across state lines… really?

    the same folks who say Obamacare is wrongheaded top-down govt – want someone to force all the states to let insurance companies from other states – sell insurance in their state – with no state regulation but replace with Federal regulation? How could you have insurance sold across state lines without deciding which states regulations would rule? If the States could have done that themselves already without the Feds, why haven’t they?

    same thing with tort “reform” and denial of pre-existing conditions.

    TMT – admit it guy- the critics are hypocrites…

    1. TooManyTaxes Avatar
      TooManyTaxes

      Larry, for a smart guy, I don’t know why you don’t understand the benefits of selling insurance across state lines. Many states have added large number of services that must be covered by policies sold in their states. That pushes up premiums and, in many instances, makes them unaffordable. Other states allow lesser coverage, which, in turn, results in lower premiums and more affordable insurance. If residents of expensive state A were free to buy insurance in state B, with fewer mandates, more residents of state A would have insurance. Got it so far?

      As what rules apply? It’s very simple. The insurance policy simply states that the laws of State B apply. It’s is done every day in business. People agree that their agreement will be governed by the laws of a specific state, generally without regard to its choice of law rules. The residents of state A would agree to be governed by the law of State B. End of problem. Doesn’t this make sense? I bet you’ve signed a hundred contracts in your life that contain choice of law provisions. If a person did not like State B’s law, he/she would simply not buy insurance from the Company in state B.

      But, as you know, federal law prohibits the sale of insurance across state lines. If this law were repealed, people could shop for less expensive insurance. Moreover, there would be pressure in State B to allow in-state companies to offer less expensive policies. Males and post menopausal women could buy policies without maternity coverage or fertility coverage. Someone might chose to forgo ED coverage for lower premiums.

      And if you think doctors don’t perform more tests to minimize malpractice risk, you are inhaling. Medical malpractice lawsuits are big business. Have you seen the commercials on cable TV?

      All of these things, plus the others I listed earlier, could have been done by Obama and they would have reduce the growth in costs and increased affordability.

      Remember no fault auto insurance? I was a teenager when Minnesota adopted it and the amount I had to reimburse my dad for my coverage actually went down a few bucks. The trial lawyers screamed, but people are still driving in Minnesota.

      Obama went the way he went because he was trolling for votes. Trolling for votes is his sole motivation in life.

  9. LarrytheG Avatar
    LarrytheG

    TMT – each state has rules for insurance.. and you’re saying that the insurance from one state would be sold in another but whose rules would govern?

    this is bizarre… if someone had trouble with the insurance company what state would they go to for help?

    and I do not buy the idea at all that insurance companies would offer lower price insurance.. what makes you think that to start with?

    Blue Cross would be already selling insurance in both states… anyhow.

    and you’re saying he way around one state’s rules is to let what 50 other states all sell insurance in each other’s states?

    and how would this help people with pre-existing conditions?

    saying the Feds don’t allow it is not entirely true. Blue Cross is free to sell insurance in every single state. You could take away any real – or I suspect – imaginary Fed Rules and why would Virginia willingly allow 49 other states to sell 49 different versions of Blue Cross in Virginia?

    this is not an alternative to Obamacare.. this is more imaginary foolishness…

    can you name one single State who has said they would do this?

    Do you even know which state has the cheapest insurance?

    Would the cheapest insurance be the one with the strictest eligibility rules essentially denying insurance to many?

    TMT – for a Smart guy -you sure got this balled up…

    you guys kill me – it’s like listening to a teen offer excuses why he doesn’t want to do something…

    1. TooManyTaxes Avatar
      TooManyTaxes

      Larry, listen please. People sell things that are governed by another state’s law all the time. Take a look at your cell phone contract. It sure isn’t governed by Virginia law. Yet you survive every day. If you go to California and rent a car, the lease will likely be governed by California law. The same thing can easily apply to insurance.

      The purpose of allowing people to buy insurance across state lines is to let people chose plans that don’t have as broad of coverage. For example, some states mandate fertility coverage. It’s expensive treatment that is reflected in higher premiums. Some people may not want or need fertility coverage. But if you cannot buy insurance across state lines, you may be required to purchase coverage. If I buy a policy from a company in Wisconsin, if the policy is governed by Wisconsin law and if I have a problem, I will complain to the state of Wisconsin. It just isn’t this hard.

      If across-state sales were allowed, don’t you think there would be advertising? Both general and targeted advertising would occur. Those who wanted lesser coverage and cheaper premiums would soon know where to shop.

      And it has nothing do to with whether a state wants to do this or not. All it would take is federal legislation. I suspect states might require some registration, but it would largely be a market solution. With federal legislation, Virginia cannot stop Blue Cross or Aetna from selling policies in Maryland or Montana.

      And “yes,” this would not necessarily help those who are expensive to insure. But even they might benefit by giving up coverage for things they didn’t want – like fertility and maternity coverage. Some people will accept a smaller network of providers in exchange for lower premiums.

      This is one of many reforms that would be needed. Another one would be to phase out EMTLA. That will push younger people to buy insurance and increase the size of the risk pools. With larger risk pools, preexisting condition coverage is possible.

  10. LarrytheG Avatar
    LarrytheG

    TMT – can you imagine someone in Va buying a health insurance policy from a company in Kansas? Can you imagine each doctor office having to deal with 50 times as many insurance companies in getting reimbursement?

    Can you imagine how a person would shop for the best deal? How would they do that? They’d have to look at 50 different state websites for Blue Cross of another company that only offers in 25 states?

    you’d have 50 different insurance companies with differing premium costs versus reimbursement rates? How would you shop this?

    this is another one of those things that starts out as a simplistic sound bite of an idea that appeals to people who have never thought about how insurance works in the first place. and they just make it up out of whole cloth and it’s got holes in it like Mack Trucks.

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