Method to Develop Health Care Peer Groups for Quality and Financial Comparisons Across Hospitals

This article examines a “nearest neighbor” methodology to provide peer groups for quality and financial comparisons between hospitals. The establishment of appropriate comparison groups is vital to making equitable comparisons across hospitals and networks.

The authors used data from 133 Department of Veterans Affairs hospitals to calculate the multidimensional Euclidean distance between medical centers.

Key Findings:

  • This novel methodology developed 133 peer groups; one centered around each medical center.
  • Because each medical center is at the core of its own set of peers, no medical center is on the fringe of a particular group. This may pose advantages for certain types of research.

This new “nearest neighbor” methodology creates peer groups centered around each hospital in the study and may enable research on cross-hospital comparisons.