An analysis of the construct validity of the Leapfrog group's hospital efficiency measure

The hyper-growth in U.S. health care expenditures over the last 50 years has placed a financial stress on families, businesses, and government. This growth in expenditures has prompted an urgent need to look at how health care can be delivered more efficiently. Performance measures allow stakeholders to measure and compare the efficiency of health care providers. Despite the large number of efficiency measures being used in research and measurement programs, little research has been done on assessing the scientific properties of these measures.;This dissertation is the first analysis of the construct validity of the efficiency measure being used in the Leapfrog Hospital Survey. The main research goal of this dissertation was to compare a hospital's performance on the Leapfrog measure with a 'gold standard' measure of hospital efficiency. As no 'gold standard' measure of hospital efficiency exists, stochastic frontier analysis (SFA), a commonly used measure of hospital cost efficiency in previous research studies, was chosen as the comparator measure. The research hypothesis was that given that both the Leapfrog measure and SFA purport to measure cost efficiency of hospitals, a strong positive correlation would be expected between a hospital's absolute and relative performance on the two measures.;For one procedure (CABG) and one condition (Pneumonia), a statistically significant, but weak, linear relationship was found between a hospital's absolute and relative performance on the Leapfrog measure and the hospital's inefficiency estimate, as determined by corrected ordinary least squares (COLS) and SFA, respectively.;Given the weak linear relationship found, one would conclude that the Leapfrog measure and comparator measure are measuring different constructs. Conclusions regarding the validity of the Leapfrog measure depend on the assumption one carries forward concerning the validity of the comparator measure (COLS and SFA). If COLS/SFA is deemed to be a 'gold standard' measure of cost efficiency, then one would interpret the weak linear relationship to indicate that the Leapfrog measure is not a valid measure of cost efficiency. If the comparator measure is not assumed to be valid measure of cost efficiency, then the conclusion is uncertain in respect to the validity of the Leapfrog measure.