Mitigating the Problem of Unmeasured Outcomes in Quality Reports

Quality reports or profiles of health care providers are inevitably based on only a measurable subset of the ``outputs" of the organization. Hospitals, for example, are being profiled on their mortality in the cardiac area but not in some other areas where mortality does not seem to be the appropriate measure of quality. If inputs used for outputs included in the profile also affect outputs outside the scope of the profile, it can be taken into account in constructing a profile of the measured outputs. This paper presents a theory for how such a commonality in production should be taken into account in designing a profile for a hospital or other health care provider. We distinguish between ``conventional" weights in a quality profile, and ``optimal" weights that take into account a commonality in the production process. The basic idea is to increase the weights on discharges for which output is measured that use inputs that are important to other discharges whose outputs are not included in the profile.