Using a latent variable approach to measure the quality of English NHS hospitals

The provision of performance information is essential for ensuring and improving the performance of health care systems. However, the lack of reliable quality information is a key problem in evaluating and improving health care. This paper estimates the performance of English NHS Acute Trusts using Dr. Foster data from the years 1996 – 2008 to investigate health outcomes after elective treatment for Acute Myocardial Infarction (AMI) and Hip Replacement. A latent variable approach is used to calculate the hospital quality effect in determining short and long term mortality and readmission rates for each year. These measures are then used to compare current and past quality of care within and across NHS Acute Trusts. Our results support that this method is well suited to measuring provider quality of care. Using these quality measures we are able to investigate the performance of NHS Acute Trusts across this time period and identify hospitals where further scrutiny of low quality is required in the future.