Star Ratings Delayed, But Need for Transparency Remains

Story Stream
recent articles

Hospital industry lobbyists earned their money recently when the Obama administration bowed to Congressional pressure and delayed the release of a new system to rate hospitals based on health outcomes for patients treated under Medicare.

The delay is likely to be just a short-term respite for the industry. Hospital ratings – whether based on patient satisfaction or various measures of quality – are here to stay. As patient-consumers increasingly transition to high-deductible plans and other models that increase their cost exposure, they are demanding more transparency and information for the choices they need to make.

The health care industry is in the position of having transparency imposed upon it by Washington simply because no one in the business has accepted real accountability for their activities. Recognizing the impossibility of improving costs and quality without a public view into provider performance, the country’s largest payer has taken action in recent years by releasing cost and quality data. The overall hospital star ratings are the latest chapter in this effort.

The reality is that these ratings aren’t perfect. Hospitals that serve disadvantaged populations and manage many complex cases claim that the scoring methodology doesn’t put them on an equal playing field with other facilities. Some key measures rely on data from nearly five years ago and don’t include performance in the prior two years.

There are also legitimate questions about the utility of the ratings. When an entire facility has the same one- to five-star rating, it’s difficult for a cancer patient or an expectant mom to translate that simple score into information that’s relevant for their specific procedures.

Any attempt to rate hospitals on the basis of quality is going to have flaws. But that’s not a reason to dismiss the effort. Simply having some awareness that not every hospital is performing equally and to signal to consumers the importance of making informed choices is an important first step toward a true market-based health care system.

CMS has announced that the final ratings will be made public in July, after giving the industry some additional time to weigh in on the proposed methodology. So the question for providers is what to do next.

For hospitals that will receive a low rating, this should be a wakeup call to the entire organization that it’s time to fundamentally change the way they do business. A mindset of “continuous improvement” that starts with the assumption that “mistakes happen” will only put these organizations into a deeper hole, especially as their competitors are working to improve. Those that don’t set higher standards and build the focus and discipline to get there will find themselves at a serious disadvantage.

The worst approach will be blame, denial or rationalization. (And we’ve already seen a bit of all three during the lead-up to the announced delay.) Even if providers don’t like the measures, the fact that they will be part of the public conversation means they need to perform against them. This starts with a serious analysis of the data to understand how the ratings came to be, and what has to change in their practices to improve going forward.

Hospitals that receive high ratings from CMS also can’t stand still. As everyone works to improve, the bar for success will continue to rise.

For providers with any star rating, there is now greater opportunity to define, publish and promote measures of quality that will be relevant to patients – whether individually or as part of an industry wide effort. This additional information can help give consumers the context they need to go beyond simpler star-type ratings.

For many consumers, when they are about to buy a car, the first thing they do is re-subscribe to Consumer Reports. They don’t do this just for the rank ordering – “This car is #1 in its class, so we’ll buy it” – but because the in-depth information available allows them to make judgments about the factors that are most important to them.

Ratings and metrics are just a starting point. Consumers can then ask more questions about their own care, the process it’s likely to follow, the costs and outcomes they can expect (including risks), and what their other options may be. This engagement is essential to building a truly competitive, market-based model in health care, and it must be supported by providing comparative data in accessible, clear formats. Delivery organizations must recognize the magnitude of effort that will be required.

At the end of the day, everyone will contest a ranking system, whether it’s hospital star ratings or the college football playoffs. Even if the current system has some flaws, there still needs to be a consistent, credible and transparent way to capture and report on relevant measures, because we know all care is not created equal.

Show commentsHide Comments