© Copyright 2007 Health Grades, Inc. All rights reserved.
May not be reprinted or reproduced without permission from Health Grades, Inc.
Hospital Report CardTM
Mortality and Complication Based Outcomes 2007
Methodology White Paper
To help consumers evaluate and compare hospital performance, HealthGrades analyzed patient outcome
data for virtually every hospital in the country. Health Grades, Inc. uses the following data sources:
Medicare inpatient data from the MedPAR database (purchased from the Centers for Medicare and
Medicaid Services). Medicare data is available for years 2003 through 2005.
Inpatient data for appendectomy provided by 17 states (AZ, CA, FL, IA, MA, MD, ME, NC, NJ, NV,
NY, PA, TX, UT, VA, WA, and WI) for years 2002 through 2004.
Ratings were based upon two different risk-adjustment methodologies.
For 28 medical issues, the risk adjustment was based upon the HealthGrades methodology
described in the Multivariate Logistic Regression-Based Ratings section of this white paper.
For respiratory failure and gastrointestinal procedures and surgeries, the risk adjustment was
based upon APR-DRG methodology developed by 3MTM Corporation. APR-DRG stands for All
Patient Refined Diagnosis Related Group. (All copyrights in and to APR-DRGs are owned by 3MTM.
All rights reserved.) This methodology is described in the APR-DRG-Based Ratings section of this
The purpose of risk adjustment is to obtain fair statistical comparisons between disparate populations or
groups. Significant differences in demographic and clinical risk factors are found among patients treated in
different hospitals. Risk adjustment of the data is needed to make accurate and valid comparisons of clinical
outcomes at different hospitals.
The MedPAR data was selected for several reasons.
First, it includes virtually every hospital in the country, with the exception of military and Veterans
Second, hospitals are required by law to submit complete and accurate information with substantial
penalties for those that report inaccurate or incomplete data.
Third, the Medicare population represents a majority of the patients for virtually all of the clinical
categories studied, with approximately 55 percent to 60 percent of all cardiac patients and 75
percent to 80 percent of all joint replacement surgeries, for example.