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July 2003
Volume 10 • Number 3


Making Hospitals More Transparent

by Yoji Akao, Asahi University, and Edward R. Chaplin, Continental Rehabilitation Hospital

Hospitals are one of the most opaque institutions in the American economy. Going to the hospital is like purchasing a shirt inside a black box. What is missing is what in the financial sectors is called transparency: the ability of outsiders—the public—to see the results to assess organizational performance.

In 1914 Ernest Codman called for public disclosure of hospital performance. That call has re-emerged and a new health system for the 21st century has created a public dialogue to do so following two recent publications of the Institute of Medicine: To Err is Human: Building A Safer Health System and Crossing the Chasm: A New Health System for the 21st Century.

This article contributes to this dialogue by presenting one possible format for characterizing hospital performance and an example to support the hypothesis that publicly disclosed performance measures can change provider and customer behavior.

Key words: hospital performance, transparency


A local newspaper reports that a woman in one community hospital underwent a second surgery to remove a 10-inch piece of medical equipment left in her abdomen. Another woman in yet another hospital in the same community underwent a second surgery to treat an abdominal abscess and remove the sponge that caused it (San Diego Union 2002). National news reports tell of a woman in Boston who died from an overdose of chemotherapy and a man in Florida who had the wrong leg removed during surgery (Millenson 1999).

A recent report by the Institute of Medicine suggests that medical errors in hospitals kill upward of 98,000 people per year (Kohn et al. 2000). That makes medical errors the eighth leading cause of death in the United States, and 58 percent of these deaths may be preventable.

The lack of safety and effectiveness of hospital care is not new. In the early 1900s Ernest Codman, a surgeon and chairman of the Committee on Hospital Standardization, called attention the horrible conditions of hospitals in the United States (Codman 1914). He proposed implementing a set of performance measures for hospitals and surgeons. However, the results of a subsequent survey on hospital and surgeon performance conducted by what is now the American College of Surgeons was so frightening that the oversight committee allegedly took all the copies to the furnace room and burned them for fear they might leak to the public.

Publicly disclosed performance reports take away professional control leaving hospitals and physicians subject to a level of scrutiny they fear and deeply resent, so they actively resist them and other changes to the health care system. However, what goes on in hospitals must become more visible and understandable to consumers to create public accountability (Institute of Medicine 2001; Berwick 2002; and Herzlinger 2000). Hospital and medical group performance have been cloaked in secrecy rendering performance invisible to outsiders. Currently consumers have much more access to cost, performance, and reliability data for automobiles, computers, and home appliances than they do for health care services.

Since what ails health care is most readily visible in hospitals, this is the focus of this article. Substitute the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) and almost any large hospital group and one will create health-care Enrons. Instead of hiding debt from auditors, hospitals are not straightforward with JCAHO—their auditors—about actual performance and often try to correct or hide long-standing defects and breakdowns in care just before JCAHO arrives.

A strong case can be made that hospitals are conditioned, or addicted, to past behaviors. Ironically, the medical field has some very useful models for change with addiction, but they are not often used to look at hospitals or the industry as a whole. One aspect all such models share is that the stimulus and accountability for change usually come from outside (Prochaska, DiClemente, and Norcross 1992). Hospitals will be no different.


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