A publicly available score for evaluating hospital financial standing

Abstract

Objectives: To create a straightforward scoring procedure based on widely available, inexpensive financial data that provides an assessment of the financial health of a hospital. Design: Methodological study. Setting: Multicenter study. Participants: All hospitals and health systems reporting the required financial metrics in 2017 were included for a total of 1,075 participants. Interventions: We examined a list of 232 hospital financial indicators and used existing models and financial literature to select 30 metrics that sufficiently describe hospital operations. In a set of hospital financial data from 2017, we used Principal Coordinate Analysis to assess collinearity among variables and eliminated redundant variables. We isolated 10 unique variables, each assigned a weight equal to the share of its coefficient in a regression onto Moody's Credit Rating, our predefined gold standard. The sum of weighted variables is a single composite score named the Yale Hospital Financial Score (YHFS). Primary Outcome Measures: Ability to reproduce both financial trends from a "gold standard" metric and known associations with non-fiscal data. Results: The validity of the YHFS was evaluated by: (1) assessing its reproducibility with previously excluded data; (2) comparing it to existing models; and, (3) replicating known associations with non-fiscal data. Ten percent of the initial dataset had been reserved for validation and was not used in creating the model; the YHFS predicts 96.7% of the variation in this reserved sample, demonstrating reproducibility. The YHFS predicts 90.5% and 88.8% of the variation in Moody's and Standard and Poor's bond ratings, respectively, supporting its validity. As expected, larger hospitals had higher YHFS scores whereas a greater share of Medicare discharges correlated with lower YHFS scores. Conclusions: We created a reliable and publicly available composite score of hospital financial stability.

Association of Graduate Medical Education With Hospital Performance and Patient Outcomes

“…Financial standing was assessed according to a ranking model created in a complementary study . In this study, we created a singular composite score out of 100, named the Yale Hospital Financial Score (YHFS), which provides a financial rank for each hospital.…”

“…Financial standing was assessed according to a ranking model created in a complementary study. 11 In this study, we created a singular composite score out of 100, named the Yale Hospital Financial Score (YHFS), which provides a financial rank for each hospital. We validated the model by showing (1) reproducibility on data excluded from the model's creation, (2) close association to predefined reference standard credit rating scores of Moody's (90.5%) and Standard and Poor's (88.8%), and (3) ability to predict expected trends in nonfiscal data, such as hospital size and Medicare percentage.…”

“…Association of Graduate Medical Education Funding With Hospital Performance and Patient Outcomes programs with multiple training sites, the GME funding used in the analysis is the sum of funds awarded across all training sites. Financial standing was assessed according to a ranking model created in a complementary study 11. In this study, we created a singular composite score out of 100, named the Yale Hospital Financial Score (YHFS), which provides a financial rank for each hospital.…”