What do hospital star ratings tell us about paying for quality?

CMS’ Hospital Quality Star Ratings Fail To Pass The Common Sense Test

By Susan Xu and Atul Grover
Health Affairs Blog, November 14, 2016

In July of 2016, the Centers for Medicare and Medicaid Services (CMS) implemented a new overall star rating system on the Hospital Compare website. Almost all hospitals are now rated between one and five stars (higher is better) depending on performance on a series of quality metrics. CMS’ intent for the new star ratings is to “help patients and families learn about hospital quality, compare facilities side by side, and ask important questions about care quality.”

However, patients and families will find the newly released star ratings from CMS confusing at best and misleading at worst. Many well-known hospitals that are highly rated by other ranking systems are absent from the list of 102 hospitals that received five stars.

The star rating methodology intends to rate all hospitals based on 64 quality measures from seven quality domains and to make domain weight reflect relative importance of a quality domain to patients. CMS has assigned greater weight (66 percent of the overall star rating) to the three domains—mortality, readmission, and patient safety—that measure clinical outcomes such as whether a patient dies, contracts a hospital-acquired infection, or is readmitted to the hospital within 30 days of an inpatient stay. Other domains that focus on processes such as efficient use of medical imaging and timeliness of care are given less weight.

Nonetheless, CMS calculated and published star ratings for hospitals that had sufficient data to report on as few as three quality domains, including some hospitals that only had data from one clinical outcome domain. The fewer the clinical outcome domains a hospital reports, the less that hospital’s overall star rating is actually tied to performance on patient outcomes.

Among the 30 five-star hospitals that had sufficient data to report only the minimum number of quality domains required—three out of a total of seven (red bars)—14 had performed higher than the national average on only one quality domain, 15 performed above average on two domains, and a single hospital excelled at those three quality domains. Hospitals that reported all seven quality domains (yellow bars), however, needed at least three quality domains with above national average performance to receive a five-star rating.

This disconnect is a result of the fact that when a hospital has insufficient data to report on one or more quality domains, the “weights” of those missing domains are reallocated to the domains for which there is sufficient data.

Major teaching hospitals, a group that includes many of the nation’s most renowned hospitals, provide comprehensive services and thus are able to report on a majority of quality domains. In fact, 80 percent of major teaching hospitals reported on all seven quality domains. To receive ratings with more stars, these hospitals have to meet a higher standard than hospitals with fewer reported quality domains because of their narrower service areas and less diverse patient populations. Not only do major teaching hospitals need to achieve performance better than the national average in more quality domains, but their overall star ratings will also be heavily tied to the outcomes of their clinical services (e.g., mortality) instead of processes of care delivery (e.g., efficient use of medical imaging). While all improvement efforts can be challenging, we believe that it takes more to improve clinical outcomes—for example, saving a patient’s life—than to improve delivery process, such as reducing the use of imaging.

Many major teaching hospitals also serve a large population of patients who live in poverty and economically deprived neighborhoods. Study after study links low socioeconomic status (SES) to increased risk of readmission after inpatient discharge. Unfortunately, the readmission risk associated with patient SES is not currently adjusted for in quality domains like readmissions. That 70 percent of the major teaching hospitals with the highest share of low SES patients (top quartile) received one or two stars reflects more of the systematic bias in the ratings system.

To provide meaningful information for patients, families, and caregivers about hospital quality, a star ratings system has to make sense. At a minimum, quality performance among hospitals with the same star rating should be consistent. And higher star ratings should reflect better actual quality performance. Unfortunately, the CMS star ratings in their current form fail to meet this basic test and will do more harm than good to patients.



By Don McCanne, M.D.

The Centers for Medicare and Medicaid Services (CMS) has been leading the charge to paying for quality instead of quantity, as if that will be the answer to our concerns about the high cost of health care. This report on CMS’s hospital quality star ratings reveals that the ratings are not only invalid, but they are potentially harmful because of the misinformation disseminated about the hospitals’ quality status.

This nonsense about paying for quality instead of quantity came about merely because our politicians and policy community refused to consider financing infrastructure changes that would control spending, while improving quality through better resource allocation - characteristics of a single payer financing system. Instead, they insisted on preserving the existing dysfunctional infrastructure that was not amenable to the mere tweaks provided by the Affordable Care Act.

CMS pretending that the hospital quality star rating will address our cost and quality problems is health policy malpractice. Let’s move on to a program that will work - a single payer national health program supervised by public stewards who care.