100 Top Hospitals, 2019 - Competitor Report Client Hospital Date of Delivery - IBM

 
100 Top Hospitals, 2019
Competitor Report

Client Hospital
Date of Delivery
Contents                               –Background and Approach

                                       –Profiled Competitors

                                       –Executive Summary

                                       –2017 Performance and 5-Year Rate of
                                        Improvement Graphs

                                       –Methodology Overview

Watson Health © IBM Corporation 2019                                          2
Background                             In this analysis, Sample Hospital’s performance and rate of
                                       improvement are compared to that of seven client-selected
and Approach                           competitors, using the 100 Top Hospitals® measures and
                                       methodologies
                                       Measures included in the analysis:
                                        OVERALL performance score
                                        Inpatient mortality                       Average length of stay
                                        Complications                             Emergency department throughput
                                        Healthcare-associated infections*  Inpatient expense per discharge
                                        Mean 30-day mortality                     Operating profit margin
                                        Mean 30-day readmissions                  HCAHPS score (Overall rating question)

                                       Results are displayed as the rank percentile of each
                                       hospital’s performance and rate of improvement compared to
                                       all U.S. hospitals within each hospital’s 100 Top peer group
                                       – Conversion to percentiles allows direct comparison of all
                                         selected hospitals, without regard to peer group

*Healthcare-Associated Infections composite index was included in the Overall Score but is not reported on the matrix graph because there
are insufficient data years to trend. We have shown HAI as a separate bar graph.

Watson Health © IBM Corporation 2019
Profiled
Competitors                            –Client Hospital
                                       –Competitor 1
                                       –Competitor 2
                                       –Competitor 3
                                       –Competitor 4
                                       –Competitor 5
                                       –Competitor 6
                                       –Competitor 7

Watson Health © IBM Corporation 2019                      4
Executive                              Overall National Performance
                                       – Sample Hospital falls into the ____ Percentile nationally for
Summary                                  both 2017 performance and 2013-2017 rate of improvement
                                       – Competitor ______ and ______ facilities lead this group
                                         based on performance on all 100 Top Hospitals measures

                                       Where Sample Hospital is strong among peers, and
                                       improving
                                       – Curabitur pulvinar dui a erat placerat gravida. Nunc non felis
                                         eu ante vestibulum posuere ultricies at neque.
                                       – Donec vehicula lorem feugiat enim congue, quis blandit
                                         metus suscipit. Mauris vel elementum velit. In at dictum arcu.

                                       Where Sample Hospital might have significant opportunity to
                                       improve nationally, and compared to these competitors
                                       – Phasellus vitae egestas felis. Sed libero ante, dignissim id
                                         massa commodo, iaculis tincidunt neque.
                                       – Pellentesque volutpat, sapien eget bibendum lobortis, sem
                                         leo feugiat odio, nec ornare neque sapien at leo.

Watson Health © IBM Corporation 2019                                                                      5
100 Top Hospitals, 2019
Overall Performance Comparison
2017 Performance and 2013-2017 Rate of Improvement
                                   100
                                                                                          Hospital Key
                                                                          3               1   Client Hospital
                                   80                       4                             2   Competitor 1
                                                                                  7
                                                                                          3   Competitor 2
 2013 - 2017 Rate of Improvement

                                                                              1           4   Competitor 3
                                                                                          5   Competitor 4
                                                                                      6   6   Competitor 5
                                   60
                                                                                          7   Competitor 6
                                                                                          8   Competitor 7

                                   40
                                             2                                                Quintile Key
                                                                                                  > 80 to 100

                                                                     8                            > 60 to 80
                                   20
                                                                                                  > 40 to 60
                                                                                                  > 20 to 40
                                                        5                                         > 0 to 20
                                    0
                                         0   20    40           60       80       100

                                                  2017 Performance

Watson Health © IBM Corporation 2019                                                                            6
100 Top Hospitals, 2019
Risk-Adjusted Inpatient Mortality
2017 Performance and 2013-2017 Rate of Improvement
                                    100

                                                                                   4                 Hospital Key
                                                                                       6
                                                                3                          7         1   Client Hospital
                                    80                                                               2   Competitor 1
  2013 - 2017 Rate of Improvement

                                                                                                     3   Competitor 2
                                                                                                     4   Competitor 3
                                                                                                     5   Competitor 4
                                    60                                                               6   Competitor 5
                                                                                                     7   Competitor 6
                                                                                                     8   Competitor 7
                                                                               8
                                    40
                                                                          2                              Quintile Key
                                                                                                             > 80 to 100
                                                                                                             > 60 to 80
                                    20                                5
                                                                                                             > 40 to 60
                                                   1
                                                                                                             > 20 to 40
                                                                                                             > 0 to 20
                                     0
                                          0   20       40      60             80               100

                                                   2017 Performance

Watson Health © IBM Corporation 2019                                                                                       7
100 Top Hospitals, 2019
Risk-Adjusted Complications
2017 Performance and 2013-2017 Rate of Improvement
                                    100
                                                       6                                            Hospital Key
                                              3                                                 1
                                                                                       7            1   Client Hospital
                                                                    8
                                    80                                        5                     2   Competitor 1
  2013 - 2017 Rate of Improvement

                                                                                                    3   Competitor 2
                                                                        2                           4   Competitor 3
                                                                                                    5   Competitor 4
                                    60                                                              6   Competitor 5
                                                                                                    7   Competitor 6
                                                                                                    8   Competitor 7
                                                                                            4
                                    40
                                                                                                        Quintile Key
                                                                                                            > 80 to 100
                                    20                                                                      > 60 to 80
                                                                                                            > 40 to 60
                                                                                                            > 20 to 40
                                                                                                            > 0 to 20
                                     0
                                          0       20        40          60        80       100

                                                           2017 Performance

Watson Health © IBM Corporation 2019                                                                                      8
100 Top Hospitals, 2019
Healthcare-Associated Infections
(HAI) Composite Performance
Higher percentile denotes better relative performance in
peer comparison group.

                        100                                                             Client Hospital
                                                                          93.6
                                                     88.4
                         90                                                             Competitor 1

                         80                                                             Competitor 2
                              72.9
                                              65.5
 2017 Rank Percentile

                         70                                                             Competitor 3
                                                                   61.0
                         60                                                             Competitor 4

                         50                                                             Competitor 5

                                                                                        Competitor 6
                         40
                                                                                        Competitor 7
                         30
                                                            25.2

                         20
                                                                                 11.9
                                        6.7
                         10

                          0

 Watson Health © IBM Corporation 2019                                                                     9
100 Top Hospitals, 2019
Mean 30-Day Mortality*
2017 Performance and 2013-2017 Rate of Improvement
                                    100
                                                                                   8                Hospital Key
                                                                               6
                                                                                                    1   Client Hospital
                                                                 1
                                    80                                                              2   Competitor 1
  2013 - 2017 Rate of Improvement

                                                                                                    3   Competitor 2
                                                                                                    4   Competitor 3
                                                                                                    5   Competitor 4
                                    60                                                              6   Competitor 5
                                                                               3
                                                                                                    7   Competitor 6
                                                                                                    8   Competitor 7

                                    40                                                 5
                                                         2
                                                             4                                          Quintile Key
                                                                                                            > 80 to 100

                                    20                                                                      > 60 to 80
                                                                                                            > 40 to 60
                                                                                                            > 20 to 40
                                                   7                                                        > 0 to 20
                                     0
                                          0   20        40           60   80           100

                                                       2017 Performance
                                                                                             *Includes AMI, HF, PN, COPD, STK

Watson Health © IBM Corporation 2019                                                                                       10
100 Top Hospitals, 2019
30-Day Readmissions
2017 Performance and 2013-2017 Rate of Improvement
                                   100
                                                      4
                                                                                                                        Hospital Key
                                                                                 3                                      1   Client Hospital
                                   80                                                                                   2   Competitor 1
 2013 - 2017 Rate of Improvement

                                                                                                                        3   Competitor 2
                                                                                                                        4   Competitor 3
                                                                                                                        5   Competitor 4
                                   60
                                                                                      7
                                                                                                                        6   Competitor 5
                                                                                                                        7   Competitor 6
                                                                                                                        8   Competitor 7

                                   40        2
                                                                                                                            Quintile Key
                                                                                                                                > 80 to 100

                                   20
                                                                                                                                > 60 to 80
                                                                                                    6                           > 40 to 60
                                                          5                                                                     > 20 to 40
                                                                                 8        1
                                                                                                                                > 0 to 20
                                    0
                                         0       20            40        60      80           100

                                                              2017 Performance
                                                                                                        *Includes AMI, HF, PN, THA/TKA, COPD, STK

Watson Health © IBM Corporation 2019                                                                                                           11
100 Top Hospitals, 2019
Severity-Adjusted Average Length of Stay
2017 Performance and 2013-2017 Rate of Improvement
                                   100
                                                                                 7
                                                                                               Hospital Key
                                                                                               1   Client Hospital
                                                                                               2   Competitor 1
                                   80                          4                               3   Competitor 2
 2013 - 2017 Rate of Improvement

                                                                                               4   Competitor 3
                                                                                               5   Competitor 4
                                   60                                                          6   Competitor 5
                                                                                     6         7   Competitor 6
                                                                                               8   Competitor 7

                                   40
                                                                            8                      Quintile Key
                                                                                                       > 80 to 100
                                                                                                       > 60 to 80
                                   20
                                                                                                       > 40 to 60
                                                                            1
                                                                        3                              > 20 to 40
                                                      2
                                             5                                                         > 0 to 20
                                    0
                                         0       20       40       60       80           100

                                                      2017 Performance

Watson Health © IBM Corporation 2019                                                                                 12
100 Top Hospitals, 2019
Mean Emergency Department Throughput*
2017 Performance and 2013-2017 Rate of Improvement
                                    100                       2
                                                                                                                  Hospital Key
                                                                                3
                                                  4                                 1                             1   Client Hospital
                                    80                                                                            2   Competitor 1
                                                                                                                  3   Competitor 2
  2013 - 2017 Rate of Improvement

                                                                                                                  4   Competitor 3
                                                                                                                  5   Competitor 4
                                    60                                                                            6   Competitor 5
                                                                           7
                                                                                5                                 7   Competitor 6
                                                                                                                  8   Competitor 7

                                    40
                                                                                                                      Quintile Key
                                                                                                                          > 80 to 100

                                    20                                                                                    > 60 to 80
                                                                  6                                                       > 40 to 60
                                                                                                                          > 20 to 40
                                              8                                                                           > 0 to 20
                                     0
                                          0       20     40           60   80           100

                                                       2017 Performance                       *Includes median time to admission; median time
                                                                                                         to discharge for non-admitted patients
Watson Health © IBM Corporation 2019                                                                                                         13
100 Top Hospitals, 2019
Inpatient Expense per Discharge*
2017 Performance and 2013-2017 Rate of Improvement
                                    100                                8
                                                                                                                 Hospital Key
                                                  1                                                             1   Client Hospital
                                                                                   6                            2   Competitor 1
                                    80
  2013 - 2017 Rate of Improvement

                                                                                                                3   Competitor 2
                                                                                                                4   Competitor 3
                                                                                                                5   Competitor 4
                                    60
                                                                                       2                        6   Competitor 5
                                                                                                                7   Competitor 6
                                                                                                                8   Competitor 7

                                    40
                                                                                                                    Quintile Key
                                                                                                                        > 80 to 100
                                                           7                                                            > 60 to 80
                                    20
                                                                                                                        > 40 to 60
                                                                 5
                                              3                                                                         > 20 to 40
                                                                       4
                                                                                                                        > 0 to 20
                                     0
                                          0           20         40        60     80       100

                                                               2017 Performance
                                                                                                 *CMS area wage index and casemix adjusted

Watson Health © IBM Corporation 2019                                                                                                     14
100 Top Hospitals, 2019
Adjusted Operating Profit Margin*
2017 Performance and 2013-2017 Rate of Improvement
                                      100
                                                                                                             Hospital Key
                                                                                                             1   Client Hospital
                                      80                                                                     2   Competitor 1
    2013 - 2017 Rate of Improvement

                                                                                                             3   Competitor 2
                                                                            4
                                                                                                             4   Competitor 3
                                                                                                             5   Competitor 4
                                      60                                                                     6   Competitor 5
                                                     2                                                       7   Competitor 6
                                                     3
                                                                                                             8   Competitor 7
                                                              1   7
                                      40
                                                                                                                 Quintile Key
                                                                                                                     > 80 to 100
                                                                           6                                         > 60 to 80
                                      20
                                                                            8                                        > 40 to 60
                                                                                                                     > 20 to 40
                                                                           5                                         > 0 to 20
                                       0
                                            0   20       40           60        80   100

                                                     2017 Performance
                                                                                           *Adjusted for net related organization expense

Watson Health © IBM Corporation 2019                                                                                                    15
100 Top Hospitals, 2019
HCAHPS Score (Overall rating question)
2017 Performance and 2013-2017 Rate of Improvement
                                       100
                                                                                                Hospital Key
                                                                                      1
                                                                                                1   Client Hospital
                                       80
                                                                                                2   Competitor 1
                                                                                                3   Competitor 2
     2013 - 2017 Rate of Improvement

                                                                                            3   4   Competitor 3
                                                                                                5   Competitor 4
                                       60                                                       6   Competitor 5
                                                                                 7              7   Competitor 6
                                                                                                8   Competitor 7

                                       40
                                                          5                                         Quintile Key
                                                                                                        > 80 to 100
                                                                                                        > 60 to 80
                                       20                                        6
                                                                                                        > 40 to 60
                                                 4        2                                             > 20 to 40

                                                                       8                                > 0 to 20
                                        0
                                             0       20        40          60        80   100

                                                              2017 Performance

Watson Health © IBM Corporation 2019                                                                                  16
Methodology
Overview

              17
Watson Health                           All non-federal U.S. acute care hospitals are eligible
                                        – Must have Medicare patient claims with valid POA coding
100 Top Study                              (2016-2017)

Eligibility                             – Must have a complete 2017 cost report
                                        – Must have data for all included measures*

                                        Specialty and Critical Access hospitals are not included
                                        Note: This year we are offering a separate analysis and reports
                                        for CAHs

                                        We exclude hospitals with the following characteristics:
                                        – Federally-owned
                                        – Non-U.S.
                                        – Fewer than 25 beds
                                        – Fewer than 100 Medicare discharges
                                        – Medicare average length of stay greater than 30 days
                                        – No Medicare deaths reported

                                       *Exceptions: For hospitals missing individual 30-day measures, BUT NOT ALL, we substitute
                                       the class median.

Watson Health © IBM Corporation 2019                                                                                               18
Hospital
Comparison
Groups
                                100 Top Hospitals® Comparison Groups                                 Winners   Total
                               Major Teaching Hospitals – 3 ways to qualify:                           15       217
                                       ─ 400+ acute beds, 0.25 GME student to acute beds ratio, 10
                                         GME sponsored programs or 20 GME affiliated programs
                                       ─ 30 GME affiliated programs
                                       ─ 0.6 GME student to acute beds ratio

                               Teaching Hospitals – 2 ways to qualify:                                 25       488
                                       ─ 200+ acute beds and 0.03 GME student to acute beds ratio
                                       ─ 200+ acute beds and 3 GME affiliated programs

                               Large Community Hospitals – 250+ beds                                   20       290

                               Medium Community Hospitals – 100 to 249 beds                            20       914

                               Small Community Hospitals – 25 to 99 beds                               20       843
                                Totals                                                                100      2,752
                              SOURCES: 2017 cost report – acute beds in service; GME student FTEs. AMA &
                              AOA residency program lists.

Watson Health © IBM Corporation 2019                                                                                   19
Scorecard Domains,
Measures and
Rank Weights
                                                                                                                 2017 Class 1 Trend
                           Domain                         Performance Measure
                                                                                                                Weight 2017* Weight

                                                        Risk-adjusted inpatient mortality                           1           1.25           1
                         Clinical Outcomes Risk-adjusted complications                                              1           1.25           1
                                                        Mean HAI index*                                             1            na            na
            Quality

                                                        Mean 30-day mortality rate (AMI, HF, PN,
                                                        COPD, STK)                                                  1           1.25           1
                         Extended
                         Outcomes
                                                        Mean 30-day readmission rate (AMI, HF, PN,
                                                        THA/TKA, COPD, STK)                                         1           1.25           1

                                                        Severity-adjusted average length of stay                    1             1            1
            Operations

                         Efficiency                     Mean emergency department throughput                        1             1            1
                                                        Inpatient expense per discharge, AWI and
                                                        case mix adjusted                                           1             1            1
                         Financial                      Adjusted operating profit margin                            1             1            1
                         Patient Experience
                                                        HCAHPS Overall Patient Rating Score                         1             1            1
                         *HAI metrics are not ranked for small community hospitals. 2017 weights for inpatient mortality, complications, 30-day
                         mortality and 30-day readmission ranks were increased to 1.25 to balance quality and operational group weights for them.

Watson Health © IBM Corporation 2019                                                                                                                20
Data
Sources and
Time Periods
                                                      2017 Performance (100 Top
             Performance Measure                                                5-Year Trend
                                                      Award)
                                                      MEDPAR Federal Fiscal Year
             Inpatient mortality                                                       MEDPAR FFY 2012-2017*
                                                      (FFY) 2016 and 2017*
             Complications
             Healthcare-associated infection (HAI)    CMS Hospital Compare
                                                                                       Not Trended
             indices                                  (CMSHC) CY 2017
             30-day mortality rates                   CMSHC July 1, 2014-June 30,      CMSHC 3 yr data sets ending June 30,
                                                      2017                             2013, 2014, 2015, 2016, 2017
             30-day readmission rates
             Average length of stay                   MEDPAR FFY 2017                  MEDPAR FFY 2013-2017
                                                                                       CMSHC CY 2014, 2015, 2016, 2017
                                                      CMSHC CY 2017
             Emergency department wait times                                           FFY 2013 (CY2013 unavailable)
                                                                                       CMS HCRIS 2018 Q3
             Inpatient expense/disch                  CMS HCRIS 2018 Q3
                                                                                       Hospital 2013, 2014, 2015, 2016, 2017
                                                      Hospital 2017 cost reports
             Operating profit margin                                                   cost reports
                                                                                       CMSHC CY 2013, 2014, 2015, 2016,
             HCAHPS Score                             CMSHC CY 2017
                                                                                       2017

                *Two years of MEDPAR data are combined to calculate each study year data point.
                .

Watson Health © IBM Corporation 2019                                                                                       21
Winner Exclusion                       Hospitals are ineligible to be considered 100 Top
                                       hospital winners if any of the following apply:
Rules
                                       – An observed inpatient mortality or complications rate that is
                                         statistically worse than expected (99% confidence) and
                                         above the outlier group 75th percentile trim point
                                       – An outlier value for inpatient expense or operating profit
                                         margin (Interquartile Range (IQR) Methodology)
                                       – A negative operating profit margin
                                       – Hospital had data for only 1 of the 3 HAI measures included
                                         in the medium community hospital comparison group (See
                                         HAI for details)
                                       – Hospital has had a 100 Top hospital award rescinded by the
                                         Watson Health 100 Top Program within 3 years

                                        Note: If a hospital meets a winner exclusion rule, this does NOT mean
                                        the hospital would have been a winner. It means they are excluded from
                                        consideration when final ranking and selection of winners occurs.

Watson Health © IBM Corporation 2019                                                                        22
General Ranking
Methodology

2017 performance                           2013-2017 rate of improvement
– Uses most current public data (various   – Regression line t-statistic is produced
  data sets ending in 2017)                  to rank each measure
– Each measure ranked independently        – Each measure ranked independently
  by peer comparison group                   by peer comparison group
– Ranks are weighted, summed and the       – Ranks are weighted, summed and the
  sum is re-ranked by comparison group       sum is re-ranked by comparison group
  to determine each hospital’s overall       to determine each hospital’s overall
  performance score                          rate of improvement score
– Winners are the top scoring overall      – Trend results are presented to inform
  performers in each comparison group        leadership decision-making. They are
                                             not used in the selection of winners.

 Watson Health © IBM Corporation 2019                                                  23
Inpatient Mortality                    Two years of MEDPAR data are combined for each
                                       data point (2016, 2017)
and Complications                      – Includes Medicare Advantage (HMO) encounter
                                         records

                                       Watson Health risk models are used to produce
                                       expected values (See methodology notes for details)

                                       Normalized z-score is the ranked metric
                                       – Indicates whether the observed is significantly different than
                                         the expected value; takes into account the effect of small
                                         numbers

                                       Risk-adjusted index is reported (Ratio of observed to
                                       normalized expected value)

                                       Hospitals with statistically bad performance on one or
                                       more of these metrics are winner excluded (See winner
                                       exclusions)

Watson Health © IBM Corporation 2019                                                                      24
Healthcare-                            CY 2017 data from CMS Hospital Compare 2018 Q3
                                       Release
Associated                             – CMS Standardized Infection Ratio (SIR) for six healthcare-
Infections                               associated infections (HAIs)
                                       – Observed HAI count for all eligible inpatient days of service
                                         or procedures for all inpatients (eligible days/procedures vary
                                         by HAI)
                                       – CMS risk models are used to produce expected values

                                       Composite measure is the mean of the included HAIs
                                       – For each HAI, we calculate a normalized z-score
                                       – The mean of the normalized z-scores is the ranked
                                         composite metric
                                       – We report the mean of the included HAI SIRs; also the
                                         individual HAI SIRs

                                       Included HAIs vary by comparison group, due to data
                                       availability
                                       – A hospital must have data for the study minimum required
                                         number of HAIs to be in-study (See table next page)
                                       – Medium community hospitals with only 1 of the 3 required
                                         HAIs are in-study but winner excluded

Watson Health © IBM Corporation 2019                                                                       25
Included Healthcare-Associated Infections by Comparison Group
                Compare Group                  Included HAIs                                                         Min # HAIs

                Major Teaching                 HAI-1, HAI-2, HAI-3, HAI-4, HAI-5, HAI-6                                   4
                Teaching                       HAI-1, HAI-2, HAI-3, HAI-5, HAI-6 (SSI:Hyst                                4
                                               excluded)

                Large Community                HAI-1, HAI-2, HAI-3, HAI-5, HAI-6 (SSI:Hyst                                4
                                               excluded)

                Medium Community*              HAI-1, HAI-2, HAI-6 (CLABSI, CAUTI, C. diff                                1
                                               INCLUDED)

                Small Community                HAIs NOT RANKED for Small Community                                        NA
                                               Hospitals
                                               * Medium community hospitals with only 1 of the 3 included HAIs are in-study
                                               but winner excluded

                HAI            Name          Definition
                HAI-1          CLABSI        Central line-associated bloodstream infections in ICUs and select wards

                HAI-2          CAUTI         Catheter-associated urinary tract infections in ICUs and select wards

                HAI-3          SSI: Colon Surgical site infection from colon surgery
                HAI-4          SSI: Hyst     Surgical site infection from abdominal hysterectomy

                HAI-5          MRSA          Methicillin-resistant Staphylococcus aureus blood laboratory-identified events

                HAI-6          C. diff       Clostridium difficile laboratory-identified events (intestinal infections)

 Watson Health © IBM Corporation 2019                                                                                             26
30-Day Mortality                       CMS Hospital Compare 2018 Q3 Release
                                       – 3-years combined for each reported data point (July 1-June 30)
and Readmission                        – Medicare Fee For Service ONLY

Rates                                  CMS determines pre-existing conditions for risk-
                                       adjustment from documentation in patient claim history;
                                       not POA coding*
                                       – Mortality: Rates for 5 patient groups are included (heart attack, heart
                                         failure, pneumonia, COPD, stroke)
                                       – Readmissions: Rates for 6 patient groups are included (heart attack,
                                         heart failure, pneumonia, THA/TKA arthroplasty, COPD, stroke)

                                       The unweighted mean of the included mortality or
                                       readmission rates is the ranked and reported metric
                                       – The comparison group median value is substituted for individual
                                         missing measures
                                       – When all mortality rates or all readmission rates are missing, the
                                         hospital is excluded

                                        *Exception: CMS pneumonia mortality rates use POA codes to identify the initial
                                        pneumonia patient cohort. The measures include patients with a principal
                                        discharge diagnosis of sepsis (not including severe sepsis) that have a secondary
                                        diagnosis of pneumonia (including aspiration pneumonia) coded as POA and no
                                        secondary diagnosis of severe sepsis coded as POA.

Watson Health © IBM Corporation 2019                                                                                        27
Severity-Adjusted                      One year of MEDPAR data is used for each data point
                                       (2017)
Average Length of                      – Includes Medicare Advantage (HMO) encounter records
Stay                                   Watson Health risk models are used to produce
                                       expected values (See methodology notes for details)
                                       – Expected values are normalized by comparison group

                                       We convert each LOS index (observed/normalized
                                       expected) to average length of stay in days (ALOS) by
                                       multiplying the index by the Grand Mean LOS of all in-
                                       study hospitals
                                       ALOS is the ranked and reported metric

Watson Health © IBM Corporation 2019                                                            28
Emergency                              CY 2017 data on emergency department (ED)
                                       patients*, from CMS Hospital Compare 2018 Q3
Department                             Release
Throughput                             We include two ED throughput metrics that are reported
Measures                               in median minutes
                                       – Time to admission
                                       – Time to discharge for non-admitted patients

                                       We calculate the unweighted mean of the two included
                                       ED metrics to produce the mean ED throughput
                                       measure, which is the ranked and reported measure
                                       We also report the individual ED measures for
                                       information only
                                       *Note: CMS requires hospitals to meet a minimum sample size of
                                       submitted records based on ED population per quarter

Watson Health © IBM Corporation 2019                                                                    29
HCRIS cost report data for hospital fiscal years ending
Inpatient Expense                      in 2017
per Discharge                          We calculate inpatient expense for each hospital
                                       department, sum the results and divide by acute
                                       inpatient discharges
                                       – Department-level inpatient expense is calculated by
                                         multiplying fully allocated cost by the ratio of inpatient
                                         charges to total charges for that department
                                       – Expense is adjusted for area wage index and casemix
                                         (Sourced from CMS)
                                       – Research, non-reimbursable and subacute cost centers are
                                         excluded

                                       We rank and report wage- and casemix- adjusted
                                       inpatient expense per discharge
                                       Hospitals that are high or low outliers for this measure
                                       are not eligible to be benchmark hospitals (IQR
                                       methodology)

Watson Health © IBM Corporation 2019                                                                  30
HCRIS cost report data for hospital fiscal years ending
Operating Profit                       in 2017
Margin                                 We calculate the difference between a hospital’s total
                                       operating revenue and total operating expense divided
                                       by the total operating revenue
                                       We adjust operating expense by adding the net related
                                       organization expense (this can be a negative number)
                                       – Where a hospital reports expense additions on worksheet G-
                                         2 lines 30-35, with titles containing home office, related org,
                                         or other corporate allocation text, we remove the lesser of
                                         ‘net related organization expense’ or ‘expense additions’
                                         from total operating expense to avoid double counting net
                                         related organization expense (Exception: where reported net
                                        related organization expense is negative, we subtract it from total
                                        operating expense and do not make any further adjustments)

                                       We rank and report adjusted operating profit margin
                                       Hospitals that are high or low outliers for this measure
                                       are not eligible to be benchmark hospitals (IQR
                                       methodology)

Watson Health © IBM Corporation 2019                                                                          31
HCAHPS Score                           HCAHPS: Hospital Consumer Assessment of
                                       Healthcare Providers and Systems inpatient survey
                                       public data set
                                       CMS Hospital Compare 2018 Q3 release
                                       – All payer dataset (January 1 - December 31, 2017)

                                       HCAHPS Score calculated for the overall rating
                                       question (“How do patients rate the hospital, overall?”)
                                       – For each hospital, the percentage of patients who rated the
                                         hospital low, medium or high were multiplied by a factor of 1,
                                         2 or 3, respectively.
                                       – The resultant weighted percent for each rating were summed
                                         to produce the HCAHPS Score (Max: 300)

                                       We rank and report the HCAHPS Score
                                       We also report individual questions for information only

Watson Health © IBM Corporation 2019                                                                      32
Methodology Notes

Watson Health risk-adjustment models used to develop expected values for inpatient
mortality and complications; severity-adjustment model for average length of stay
– Inpatient mortality model only
   • Excludes records with ‘Do Not Resuscitate’ (Z66; V49.86) coded as POA
   • Excludes patients admitted to hospice care (discharged from acute care)
– All models
   • Include palliative care patient records (Z515; V66.7)

All models use Agency for Healthcare Research & Quality (AHRQ) Clinical
Classifications Software (CCS) grouping to develop rate tables for calibrating risk and
severity adjustment models

 Watson Health © IBM Corporation 2019                                                 33
Methodology Notes

Inpatient mortality and complications expected values are normalized by multiplying
them by the observed/expected ratio for each hospital’s comparison group. A z-score
is calculated from each observed and normalized expected value. The z-score is the
ranked metric.

Inpatient mortality and complications high outliers, used for winner exclusions, are
determined by finding the hospitals with statistically worse than expected results at
99% confidence that are also above the outlier group 75th percentile trim point.

Length of stay (LOS) expected values are normalized by multiplying them by the
observed/expected ratio for each hospital’s comparison group. The LOS Index
(observed/normalized expected) is converted into average length of stay in days by
multiplying by the mean LOS of the in-study population.

 Watson Health © IBM Corporation 2019                                                   34
Methodology Notes

Due to high frequency of invalid POA indicator code ‘0’ in MEDPAR, we have
modified our MEDPAR data processing.
– Valid POA codes are retained (N,Y,W,U,1)
– Where invalid POA code ‘0’ appears records are processed as follows:
   • All principal diagnosis codes (dx) are treated as ‘present on admission’
   • All secondary dx on the CMS exempt list are treated as exempt
   • Secondary dx coded ‘Y’ or ‘W’ more than 50 percent of the time in the Watson Health all-payer data
     base are treated as ‘present on admission’
   • All others are treated as not present on admission

   Note: This reduces false positives for complications and more accurately determines the risk of death and complications,
   and expected length of stay.

 Watson Health © IBM Corporation 2019                                                                                         35
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  Watson Health © IBM Corporation 2019                                                                                                                                      36
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Watson Health © IBM Corporation 2019                                                 37
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  Watson Health © IBM Corporation 2019                                                                                                                                    38
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