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

DATE: WEDNESDAY, December 14, 1994                   TAG: 9412140108
SECTION: BUSINESS                    PAGE: B-8   EDITION: METRO 
SOURCE: SANDRA BROWN KELLY
DATELINE:                                 LENGTH: Medium

REPORT GRADES HOSPITALS, BUT ITS USEFULNESS IS LIMITED

It's a mouthful to say and a formidable several hundred pages of information to digest. The four-volume report was released Tuesday.

Because of the type of report it is, the rankings of hospitals in Southwest Virginia are an oversimplification of a complicated procedure. The rankings range from 1.61 points to 3.00 against a best score of 1 and a worst score of 4.

They are based on calculations in 18 areas of performance such as gross patient revenue per adjusted admission and fixed asset financing ratio and Medicaid participation.

The results show that Lee County Community is the most efficient hospital in this region and Community Hospital of Roanoke Valley is the least efficient. But it requires a look at detailed information to learn why they ended up that way.

For example, Community's labor cost per admission (adjusted to include both inpatient and outpatient admissions) is more than double that at Lee County. Community averages the equivalent of 5.74 full-time employees per adjusted occupied bed to Lee's 2.90.

Does that mean one has too many staffers per patient or too few? That's the kind of question the report raises, but many won't be answered for another year.

Nowhere does this initial report indicate which facilities provide the best care, which is what most people probably want to know.

The main advantage of the Virginia Health Services Cost Review Council's effort is that it starts a trend of providing the public health care information. Next year's report is to have information on quality of care.

Before the 1992 General Assembly told the council to develop a strategy for measuring hospitals against each other, the council policed pricing by monitoring charges and sometimes making hospitals change them.

It is hoped that by giving the public information about the facilities, the pricing will be driven by the market, by supply and demand. The data are intended to make the hospitals and nursing homes pay more attention to policing their own costs. This time, the information is most useful to companies contracting to buy health care services or setting up networks for those services.

Hospitals' reactions to the report have been low-key. Officials worry that it will be misinterpreted but generally are glad for the scrutiny.

The report is "an important first step in educating the public about how hospitals are using their financial resources," Donald Lorton said. He is executive vice president and chief financial officer for Carilion Health System in Roanoke, which operates several hospitals in the region, including Community.

Future studies measuring and comparing facilities' surgical outcomes, unplanned readmissions and infection rates will provide the quality-of-care information, Lorton said.

``We're pleased we're ranked well among the Roanoke facilities," said Terri Rush, spokeswoman for Lewis-Gale Hospital in Salem. The hospital also appreciated the recognition of its community support through the taxes it pays, she said.

The community-support data are divided into two categories. One is for uncompensated care as a proportion of total expenses plus taxes paid as a proportion of expenses. The second category is for Medicaid participation.

Among the three major Roanoke Valley hospitals, the leaders in these categories are no surprise. Lewis-Gale, as a for-profit hospital, was highest in the taxes-paid category. Community, which operates clinics for the indigent, was highest in Medicaid participation.

Because of the way the geographical grouping was done, two area hospitals, Stonewall Jackson in Lexington and Bath County Community, are not in the Southwest region, and their scores of 2.22 and 2.89, respectively, can't be compared with hospitals in this region.

The nursing-homes data, which are based on 13 factors, rank Eldercare of Franklin County tops in efficiency with a 1.54 score and Woodhaven Nursing Home at Montvale at the bottom with a score of 3.62.

Again, there is no measurement of quality of care.