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Quality Measurements, Benchmarks and Ratios

By Brent A. Metfessel MD, MS, CMP™ (Hon)

Once an expected case mix index value is calculated for a medical provider or facility, comparison of the provider’s actual practice patterns to the expected value can take place.

Benchmarks

In medical severity case-mix reporting, there are three basic measures that utilize expected values: 

• Ratio of actual to expected (actual / expected):  This measure is terms a “performance ratio” or an “efficiency ratio”.  A value of about 1.0 would mean that practice patterns are close to the expected target or plan average.  For cost comparisons, a value of slightly below 1.0 might even be more ideal as long as the provision of high-quality care is maintained.
• The difference between actual and expected values (actual – expected):  This measure is termed the “cost variance” and is very useful for looking at the cost impact of practice variation.  An additional advantage of this measure is it’s approximately normally distribution, unlike performance ratios which are skewed toward the high end.  This means that relatively simple statistics can be used to isolate providers or facilities with high positive cost variances for further analysis. Often, a z-score (number of standard deviations from the mean) of +2 or more is used as the approximate criteria for overly high utilization.  It needs to be noted that a highly negative cost variance can point to care problems as well, in particular problems with patient access to care or underutilization of services, so the reasons for very low cost variances also need to be discovered.
• The ratio of the expected value to the unadjusted plan average (expected / average):  This measure is the “illness burden” of the provider and becomes a measure of the level of illness in the provider’s patient panel. A high illness burden means that the provider or facility treats patients that are more ill than the average provider or facility. A provider with a high illness burden and yet a reasonable performance ratio means that the provider is highly competent with complex patients and the health plan should give special attention to such providers to keep them as active as possible in the network.

Conclusion

Do you know of any other medical quality measures that utilize expected values; please comment and opine?

Related Information Sources:

Practice Management: http://www.springerpub.com/prod.aspx?prod_id=23759

Financial Planning: http://www.jbpub.com/catalog/0763745790

Risk Management: http://www.jbpub.com/catalog/9780763733421

Healthcare Organizations: www.HealthcareFinancials.com

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