Hospital Compare Star Ratings: Too Much Power in the Patient Review?

Customer reviews have become a powerful force in recent years, as everything from apartments to restaurants have seen the success of their business affected by online comments and ratings. With the introduction of its new star rating system, the Center for Medicare & Medicaid Services’ (CMS) Hospital Compare database now offers consumers a way to assess hospitals based on patient reviews. Some, however, are already suggesting the system needs revamping to include other quality measurements in addition to patient survey responses.

Hospital Compare and the HCAHPS

Choosing a doctor or hospital is no easy task. For years, patients have searched for useful tools that would allow them to compare hospitals and services to help ensure they are making the best decision. Originally established in 2002, Hospital Compare is a consumer-oriented website that allows prospective patients to compare hospitals in regard to the following categories:

  • Patient survey results
  • Timely and effective care
  • Readmissions, complications and deaths
  • Use of medical imaging
  • Linking quality to payment
  • Medicare volume

The first category mentioned above, patient survey results, provides information from the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey. The HCAHPS survey set the national standard in 2006 when it began collecting and publicly reporting data to allow comparisons of hospitals in local markets and across the country. In addition to compiling and reporting data for thoughtful consideration in the comparison of hospitals, the survey hopes to establish incentives to improve quality of care and increase the return value of public investment.

The survey consists of 27 questions and is administered to random sample groups of patients within six weeks of discharge. The survey is geared to produce results on how the patients viewed their communication with the medical staff, cleanliness of the facility, information on medication and discharge, and if they would recommend the hospital. By collecting this information and making it available to the public, the HCAHPS survey hopes to enhance hospitals’ accountability by increasing the transparency of the quality of care.

The HCAHPS survey is currently being used in the Hospital Value-Based Purchasing (VBP) program created by the Affordable Care Act (ACA). With the VBP program, Medicare now has a payment system in place that takes a pay-for-performance approach. The Hospital VBP program adjusts payments based on their total performance score that is comprised of four domains:

  • Clinical process of care
  • Patient experience of care
  • Outcome
  • Efficiency

The HCAHPS survey is used when calculating the patient experience of care domain score, which is weighted as 30% of the total performance score. As a result, board members and hospital executives have increasingly begun implementing new plans and procedures to improve their HCAHPS survey score to ensure better reimbursement rates from Medicare. This, in essence, has given hospitals a bit of a head start in implementing policies that can improve their star rating in the new system, as that system is based on HCAHPS survey results.

Five-Star Rating System

With the introduction of the Hospital Compare star rating system in April of 2015, CMS now has a five-star ranking method in place for the public to view and compare the quality of care between hospitals. Hospital Compare has information about the quality of care at over 4,000 Medicare-certified hospitals, including acute care hospitals, critical access hospitals, children’s hospitals, Veterans Affairs (VA) medical centers and hospital outpatient departments. The star ratings, with one star being the lowest and five stars being the highest, are based on an average of the hospitals’ performance on each of the 11 publicly reported measures from the HCACPS survey.

The first results of the five-star rating system were released this past April, with CMS planning to release updated ratings every quarter. As seen in Figure 1 below, the first rankings released had over 40% of hospitals receiving either a four or five-star rating. These initial ratings came from patient surveys gathered between July 1, 2013, and June 30, 2014.

Many of the hospitals that received the five-star rating are smaller specialty hospitals that focus on elective surgeries. According to Modern Healthcare, more than 60 of the 250 hospitals that received the five-star ratings are specialty facilities. It should be noted that historically these facilities have received higher patient review scores than general hospitals. This is partially due to the fact that these hospitals are able to have a narrow clinical focus and are designed to provide high quality care for specific services, as opposed to the wide range of services that general hospitals have to provide such as hectic emergency rooms and care for a diversity of illnesses, factors that make it more difficult for general hospitals to receive positive feedback on their patients’ experience.

There has been mixed reaction among industry leaders thus far to the new star rating system. For example, Akin Demehin, senior associate director at the American Hospital Association (AHA) noted: “While star ratings can be an effective way to make quality information easier to understand, the devil is in the details. There’s a risk of oversimplifying the complexity of quality care or misinterpreting what is important to a particular patient, especially since patients seek care for many different reasons.”

For now, hospitals are valuing their ratings but also taking them with a grain of salt. With a high star rating, a prospective patient can enjoy a sense of reassurance that they will receive valuable care from a highly-rated hospital. Conversely, hospitals fear that if they receive a lower rating than their peers it may not be an accurate reflection of the hospital’s quality as the star rating is solely based on the patient reviews.

Room for Improvement

The current star rating system is a good starting point to allow patients to compare hospitals, but it may not capture the overall value and quality of care because it only uses the patient experience survey. Hospitals would like additional elements of care CMS currently tracks included in the overall star rating of a facility. The measures they would like taken into account include the use of medical imaging, number of Medicare patients, readmissions rates, complication rates and death rates. CMS has noted it realizes that the rankings need to encompass more than just patient reviews, and wants to expand the ranking system to include star ratings on clinical outcomes and safety in the coming years.

The Hospital Compare star rating system is not the first star rating system that has been established by CMS. CMS has other star rating systems in place to rate nursing homes, dialysis centers and private Medicare Advantage insurance plans. CMS’s five-star system for skilled nursing facilities began in December of 2008 to assist the public in identifying meaningful distinctions among skilled nursing providers. Similar to the current reaction to the Hospital Compare system, the merits of the skilled nursing five-star system were highly debated in its infancy. Despite those concerns, and after adjustments were made, the skilled nursing rating system is a frequently referenced metric in the industry seven years after its introduction. It should be noted, however, that unlike the Hospital Compare star rating that currently focuses on patient survey results, the Nursing Home Compare star rating is based on health surveys, staffing numbers and quality measures.

The five-star rating system is a good resource for consumers to use when evaluating hospitals, but it does not mean that all will use it right away. It will take time for consumers to access and understand this information. It is too early to determine the degree to which patients have used the raw HCAHPS survey scores and quality measures that CMS tracks and publishes.

Even if the new five-star rating system is not perfect, it is drawing attention to the patient’s perspective and enhancing the power of the patient to choose a hospital based on quality information. That, most would surely agree, is a positive step toward the universal goal of improving the patient experience and the overall quality of care.

About The Authors

Elliot Kaple

Elliot Kaple

Elliot Kaple is an associate with Lancaster Pollard in Columbus. He earned his bachelor of economic management degree with a finance concentration from Ohio Wesleyan University. He is responsible for financial modeling and valuation, credit analysis, interaction with all funding participants and coordinating the closing process.

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