A publicly available score for evaluating hospital financial standing

A. AbstractO_ST_ABSObjectivesC_ST_ABSTo create a straightforward scoring procedure based on widely available, inexpensive financial data that provides an assessment of the financial health of a hospital. DesignMethodological study. SettingMulticenter study. ParticipantsAll hospitals and health systems reporting the required financial metrics in 2017 were included for a total of 1,075 participants. InterventionsWe 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 Moodys 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 MeasuresAbility to reproduce both financial trends from a "gold standard" metric and known associations with non-fiscal data. ResultsThe 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 Moodys and Standard and Poors 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. ConclusionsWe created a reliable and publicly available composite score of hospital financial stability. B. Article SummaryStrengths and Limitations of This Study O_LIThere is a lack of models for assessing the financial state of hospitals in a robust and systematic way using publicly available data. C_LIO_LIWe created the Yale Hospital Financial Score, a compound financial ranking of hospitals using a diverse collection of hospital financial metrics. C_LIO_LIThe score ranks hospitals from 0 to 100 and was validated by showing reproducibility on a pre-excluded sample and strong correlation with "gold standard" metrics C_LIO_LIThis score has been developed to aid health policy researchers and has not yet been validated in studies of longitudinal financial outcomes C_LI