On measuring the quality of hospitals: a simple method of constructing a composite quality index

Purpose: Researchers, policymakers and hospital managers often encounter numerous quality measures when assessing hospital quality. The purpose of this paper is to address the challenge of summarising, interpreting and comparing multiple quality measures across different quality dimensions by proposing a simple method of constructing a composite quality index. The method is applied to hospital administrative data to demonstrate its use in analysing hospital performance. Design/methodology/approach: Logistic and fixed effects regression analyses are applied to secondary admitted patient data from all hospitals in the state of Victoria, Australia for the period 2000/2001–2011/2012. Findings: The derived composite quality index was used to rank hospital performance and to assess changes in state-wide average hospital quality over time. Further regression analyses found private hospitals, day hospitals and non-acute hospitals were associated with higher composite quality, while small hospitals were associated with lower quality. Practical implications: The method will enable policymakers and hospital managers to better monitor the performance of hospitals. It allows quality to be related to other attributes of hospitals such as size and volume, and enables policymakers and managers to focus on hospitals with relevant characteristics such that quantity and quality changes can be better understood, monitored and acted upon. Originality/value: A simple method of constructing a composite quality is an indispensable practical tool in tracking the quality of hospitals when numerous measures are used to capture different aspects of quality. The derived composite quality can be used to summarise hospital performance and to identify factors associated with quality via regression analyses.