Background: There is a growing trend towards the production of "hospital report-cards" in which hospitals with higher than acceptable mortality rates are identified. Several commentators have advocated for the use of Bayesian hierarchical models in provider profiling. Several researchers have shown that some degree of misclassification will result when hospital report cards are produced. The impact of misclassifying hospital performance can be quantified using different loss functions.
Methods: We propose several families of loss functions for hospital report cards and then develop Bayes rules for these families of loss functions. The resultant Bayes rules minimize the expected loss arising from misclassifying hospital performance. We develop Bayes rules for generalized 1-0 loss functions, generalized absolute error loss functions, and for generalized squared error loss functions. We then illustrate the application of these decision rules on a sample of 19,757 patients hospitalized with an acute myocardial infarction at 163 hospitals.
Results: We found that the number of hospitals classified as having higher than acceptable mortality is affected by the relative penalty assigned to false negatives compared to false positives. However, the choice of loss function family had a lesser impact upon which hospitals were identified as having higher than acceptable mortality.
Conclusion: The design of hospital report cards can be placed in a decision-theoretic framework. This allows researchers to minimize costs arising from the misclassification of hospitals. The choice of loss function can affect the classification of a small number of hospitals.