2021 Winning Hospitals: Cost efficiency - Lown Institute Hospital Index

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Watch the video of the creators of the Lown Hospitals Index and an expert panel discussing cost efficiency findings, the methodology, and what’s coming up next.

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The Lown Institute Hospitals Index is the first ranking to evaluate cost efficiency for more than 3,000 U.S. hospitals. The Cost Efficiency metric measures how well hospitals achieve great outcomes at a low cost to Medicare.

The Lown Institute analysis found wide variation in cost, even among hospitals of the same type, size, region, and with similar mortality rates. Overall, if all hospitals performed as well as the most cost-efficient hospitals, Medicare would save $8 billion each year. See the top hospitals for cost efficiency and other key findings from our results below. (press release | methodology)

Key Takeaways

If all hospitals in the Lown Index achieved the outcomes and costs as the best 750 hospitals for cost efficiency, Medicare would save $8 billion each year.
Some hospitals cost Medicare thousands more per patient than other hospitals of the same type, size, and location.
Among hospitals with average 30-day mortality rates, Medicare costs varied three-fold, ranging from $9,000 to $27,000 per patient.

America’s most cost efficient hospitals

These are the 50 most cost-efficient hospitals in the US on the Lown Index. These hospitals had the best 30-day and 90-day outcomes at the lowest per-patient cost to Medicare.

RANK	NAME	STATE
1	Pinnacle Hospital	IN
2	Saint Mary’s Regional Medical Center	NV
3	Mercy Medical Center-Dubuque	IA
4	Encino Hospital Medical Center	CA
5	Park Ridge Health	NC
6	Oroville Hospital	CA
7	Saint Michael’s Medical Center	NJ
8	UnityPoint Health – Meriter	WI
9	East Liverpool City Hospital	OH
10	Maple Grove Hospital	MN
11	Newton-Wellesley Hospital	MA
12	Saratoga Hospital	NY
13	St. Josephs Community Hospital of West Bend	WI
14	Straub Clinic and Hospital	HI
15	Inova Alexandria Hospital	VA
16	Mount Auburn Hospital	MA
17	Calverthealth Medical Center	MD
18	Brigham and Women’s Faulkner Hospital	MA
19	Centinela Hospital Medical Center	CA
20	Renown South Meadows Medical Center	NV
21	The Miriam Hospital	RI
22	Mills-Peninsula Medical Center	CA
23	Desert Valley Hospital	CA
24	Howard County General Hospital	MD
25	St. Luke’s Hospital – Anderson Campus	PA
26	Asante Ashland Community Hospital	OR
27	Lehigh Regional Medical Center	FL
28	Bozeman Health Deaconess Hospital	MT
29	Inova Loudoun Hospital	VA
30	Sherman Oaks Hospital	CA
31	Sentara Princess Anne Hospital	VA
32	Sky Ridge Medical Center	CO
33	EvergreenHealth Medical Center	WA
34	Petaluma Valley Hospital	CA
35	George Washington University Hospital	DC
36	Southside Community Hospital	VA
37	Holy Cross Hospital	MD
38	Inova Mount Vernon Hospital	VA
39	Beaumont Hospital, Troy	MI
40	Adventist Health Castle	HI
41	Northwestern Memorial Hospital	IL
42	Beth Israel Deaconess Hospital-Milton	MA
43	Doctors’ Community Hospital	MD
44	UNM Sandoval Regional Medical Center	NM
45	Emory Johns Creek Hospital	GA
46	St. Peter’s Hospital	NY
47	Beaumont Hospital, Grosse Pointe	MI
48	Kuakini Medical Center	HI
49	Fairview Lakes Medical Center	MN
50	Prattville Baptist Hospital	AL

Hospital comparisons in Major cities

This table compares Medicare costs for large major teaching hospitals in the same city with similar mortality rates. For each pair of hospitals, we calculate Potential Medicare Savings: how much Medicare would save if the less efficient hospital had the same per-patient costs as its more efficient peer.

		30 DAY MORTALITY	30-DAY PER-PATIENT COST	POTENTIAL MEDICARE SAVINGS
BALTIMORE	Johns Hopkins Bayview Medical Center	6.5	$12,697	–
BALTIMORE	The Johns Hopkins Hospital	7.1	$14,721	$18.5 million
BOSTON	Mount Auburn Hospital	6.7	$11,708	–
BOSTON	Brigham and Women’s Hospital	6.8	$14,567	$33.4 million
CHICAGO	Advocate Illinois Masonic Medical Center	7.1	$12,913	–
CHICAGO	Rush University Medical Center	7.9	$16,372	$27.5 million
FT LAUDERDALE	JFK Medical Center	9.8	$13,289	–
FT LAUDERDALE	St Mary’s Medical Center	10.9	$21,597	$13.9 million
HOUSTON	Baylor St. Luke’s Medical Center	7.3	$12,631	–
HOUSTON	Memorial Hermann Texas Medical Center	8.0	$15,071	$13.9 million
INDIANAPOLIS	Franciscan Health Indianapolis	8.9	$14,073	–
INDIANAPOLIS	Indiana University Health	9.0	$16,870	$24.7 million
LOS ANGELES	Huntington Memorial Hospital	7.9	$12,333	–
LOS ANGELES	Loma Linda University Medical Center	8.5	$16,387	$15.8 million
SAN FRANCISCO	UCSF Medical Center	6.8	$14,042	–
SAN FRANCISCO	Stanford Health	6.8	$16,648	$21.4 million
ST LOUIS	Mercy Hospital St. Louis	7.5	$13,997	–
ST LOUIS	Barnes Jewish Hospital	8.3	$16,075	$25 million
WASHINGTON DC	Howard University Hospital	7.1	$11,896	–
WASHINGTON DC	Medstar Georgetown University Hospital	7.4	$14,894	$12.8 million

Most COST EFFICIENT Hospitals in each state

These are the best-ranked hospitals for cost efficiency in each state.

STATE	Most Cost Efficient Hospital
Alaska	Alaska Regional Hospital
Alabama	Prattville Baptist Hospital
Arkansas	Baptist Health Medical Center- Conway
Arizona	Mayo Clinic Hospital
California	Encino Hospital Medical Center
Colorado	Sky Ridge Medical Center
Connecticut	Johnson Memorial Hospital
Washington, DC	George Washington University Hospital
Delaware	Beebe Medical Center
Florida	Lehigh Regional Medical Center
Georgia	Emory Johns Creek Hospital
Hawaii	Straub Clinic and Hospital
Iowa	Mercy Medical Center-Dubuque
Idaho	St. Luke’s Regional Medical Center
Illinois	Northwestern Memorial Hospital
Indiana	Pinnacle Hospital
Kansas	Ascension Via Christi Hospital St. Teresa
Kentucky	Saint Joseph East
Louisiana	Thibodaux Regional Medical Center
Massachusetts	Newton-Wellesley Hospital
Maryland	Calverthealth Medical Center
Maine	York Hospital
Michigan	Beaumont Hospital, Troy
Minnesota	Maple Grove Hospital
Missouri	St. Mary’s Medical Center
Mississippi	Mississippi Baptist Medical Center
Montana	Bozeman Health Deaconess Hospital
North Carolina	Park Ridge Health
North Dakota	Chi St. Alexius Health
Nebraska	CHI Health Lakeside
New Hampshire	Catholic Medical Center
New Jersey	Saint Michael’s Medical Center
New Mexico	UNM Sandoval Regional Medical Center
Nevada	Saint Mary’s Regional Medical Center
New York	Saratoga Hospital
Ohio	East Liverpool City Hospital
Oklahoma	Hillcrest Hospital South
Oregon	Asante Ashland Community Hospital
Pennsylvania	St. Luke’s Hospital – Anderson Campus
Rhode Island	The Miriam Hospital
South Carolina	Prisma Health Baptist Parkridge
South Dakota	Avera Mckennan Hospital & University Health Center
Tennessee	Franklin Woods Community Hospital
Texas	Houston Methodist Hospital
Utah	Alta View Hospital
Virginia	Inova Alexandria Hospital
Vermont	Central Vermont Medical Center
Washington	EvergreenHealth Medical Center
Wisconsin	UnityPoint Health – Meriter
West Virginia	Weirton Medical Center
Wyoming	St. John’s Health

states ranked by average hospital cost efficiency

States sorted by average hospital ranking on cost efficiency.

RANK	STATE
1	Washington, DC
2	Hawaii
3	Maryland
4	Rhode Island
5	Massachusetts
6	Virginia
7	Colorado
8	Connecticut
9	Nevada
10	Minnesota
11	Oregon
12	California
13	New Jersey
14	Arizona
15	Washington
16	South Carolina
17	North Carolina
18	Montana
19	Pennsylvania
20	Ohio
21	Michigan
22	Delaware
23	New York
24	Utah
25	New Mexico
26	Florida
27	Wisconsin
28	New Hampshire
29	Texas
30	Illinois
31	West Virginia
32	North Dakota
33	Georgia
34	South Dakota
35	Tennessee
36	Wyoming
37	Alaska
38	Maine
39	Idaho
40	Indiana
41	Vermont
42	Nebraska
43	Missouri
44	Alabama
45	Kansas
46	Kentucky
47	Iowa
48	Louisiana
49	Oklahoma
50	Arkansas
51	Mississippi

U.S. NEWS HOSPITALS

Cost efficiency grades and rankings for the 20 top hospitals on the US News & World Report ranking.

US News rank	Name	Cost Efficiency grade	Cost Efficiency rank
1	Mayo Clinic Hospital Rochester	119	A
2	Cleveland Clinic	751	A
3	Ronald Reagan UCLA Medical Center	308	A
4	The Johns Hopkins Hospital	791	A
5	Massachusetts General Hospital	452	A
6	Cedars-Sinai Medical Center	86	A
7	New York-Presbyterian Hospital	204	A
8	NYU Langone Hospitals	333	A
9	UCSF Medical Center	433	A
10	Northwestern Memorial Hospital	41	A
11	Michigan Medicine	699	A
12	Stanford Health Care	1571	B
13	Hospital of University of Pennsylvania	893	A
14	Brigham and Women’s Hospital	653	A
15	Mayo Clinic Hospital	100	A
16	Houston Methodist Hospital	66	A
17	Barnes Jewish Hospital	1750	B
17	Mount Sinai Hospital	448	A
18	Rush University Medical Center	1878	B
19	Vanderbilt University Medical Center	2019	B

METHODOLOGY

The cost efficiency metric is a ratio of hospitals’ mortality rates compared to their Medicare costs. Hospitals with the lowest mortality and the lowest costs received the best scores in cost efficiency.

For mortality, we used hospitals’ risk-standardized 30- and 90-day mortality for Medicare patients hospitalized between 2016 and 2018. For cost, we used 30- and 90-day total risk-standardized Medicare payments for patients hospitalized in 2016 to 2018. Payments were standardized for hospital patient risk (the conditions that hospital patients have as well as the procedures they received), so that hospitals with sicker patients were not punished for spending more to treat them. Payments were also adjusted for patient survival, so that hospitals with low patient survival did not have artificially lower costs. Lastly, payments were adjusted for Medicare’s regional cost differences, so that hospitals that get paid more by Medicare because of regional differences did not appear to have higher costs.

For each hospitalization, we found the claim payment amount in all claims within 30 or 90 days from the admission date. These claims included: inpatient, outpatient, carrier, skilled nursing facility, home health agencies, durable medical equipment, and hospice claims. We excluded any claims where Medicare denied the payment. Transfers were excluded.

Medicare adjusts their payment amounts to hospitals and other providers based on various geographic factors. To account for this, we calculated standardized payments using the Virtual Research Data Center’s public use files of 2016 to 2018 Hospital Referral Regions (HRR) standardized ratio tables for patients over 65.

Our goal for the cost efficiency score was to reward hospitals with low mortality rates and low costs, and give the lowest scores to hospitals with high mortality rates and high costs. We also decided to bias our scores to give hospitals with high costs and low mortality a higher score than hospitals with low costs and high mortality. This is because we believe that if there is a trade-off between costs and mortality, we should favor better mortality rates compared to lower costs.

For a more detailed methodology, see our full methods paper.

Media inquiries should be directed to Aaron Toleos, vice president of communications for the Lown Institute, at atoleos@lowninstitute.org.

COST EFFICIENCY

America needs hospitals that can achieve great outcomes at a low cost.

View recording of our launch event.

Key Takeaways

America’s most cost efficient hospitals

Hospital comparisons in Major cities

Most COST EFFICIENT Hospitals in each state

states ranked by average hospital cost efficiency

U.S. NEWS HOSPITALS

METHODOLOGY

View recording of our launch event.

Key Takeaways

America’s most cost efficient hospitals

Hospital comparisons in Major cities

Most COST EFFICIENT Hospitals in each state

states ranked by average hospital cost efficiency

U.S. NEWS HOSPITALS

METHODOLOGY

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