Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, November 11, 1994                   TAG: 9411110042
SECTION: BUSINESS                    PAGE: A-11   EDITION: METRO 
SOURCE: SANDRA BROWN KELLY STAFF WRITER
DATELINE:                                 LENGTH: Medium

HEALTH CARE EFFICIENCY STUDIED

The Virginia Health Services Cost Review Council will release on Dec. 13 an "efficiency and productivity report," which ranks hospitals based on 18 financial indicators and ranks nursing homes on 13 factors. They include patient revenue, labor costs, use of facilities, debt and the facility's support of the community.

The data, collected for 1993 through April 1994, have been used to compare similar facilities in the same region and are intended to make the hospitals and nursing homes pay more attention to policing their costs, said Janet Lynch, the council's director of data management and analysis.

She made the comments at a meeting in Roanoke of Western Virginia health care providers.

Lynch said the information is much like what investors expect to know about companies in which they buy stock.

Although the initial report will not address the quality of care provided by medical institutions, Lynch said, it at least makes public what information is available on how the health care institutions do business. And it gets everyone thinking about the collection of more data, she said.

This first report will be most useful to companies and health plans that are contracting to buy health care services or trying to form networks to provide those services, she said.

By next year, the hospital report should include data on quality of care, using information being collected from Medicaid patients and the state employees' health insurance program, she said.

Previously, the council's mission of promoting cost controls was carried out by reviewing what facilities charged for various services and sometimes requiring that the charges be lowered, she said.

"We intervened in the market," Lynch said.

But even with the intervention, Virginia's health care costs were rising faster than the rest of the country's, she said.

As a result, the General Assembly in 1992 directed the council to come up with a way to identify efficient health care institutions. Each facility has been given a chance to look at its profile and respond to it. That response will be included in the report, Lynch said.

The methodology for the report was developed by the Williamson Institute of Health Studies at Virginia Commonwealth University. The report will be offered in three volumes, one each on hospitals and nursing homes and a third on hospital trends in the state. In addition to the council, the groups that had representatives working on the efficiency effort included the Virginia Hospital Association, the Virginia Health Care Association and the Virginia Association of Nonprofit Homes for the Aging.

Lynch and others who worked on it have been visiting localities to explain how the information can be interpreted and used.