The US Centers for Medicare and Medicaid Services (CMS) released the first ratings list for the Medicare Overall Hospital Star Ratings Program on July 27, 2016. CMS developed the program to help consumers make more informed decisions by giving them a way to compare hospitals based on quality ratings.
After the initial ratings release, many hospitals sought to better understand how the Star Ratings Program works and determine how they could improve their scores. To shed light on these issues, the Deloitte Center for Health Solutions analyzed the 64 quality measures CMS used in July 2016 to compute the star ratings. Our analyses point to four key findings:
- There are many ways to achieve a 5-star rating. CMS designed the program to capture multiple aspects of quality and to offer a number of pathways for hospitals to achieve a 5-star rating. Based on service mix and patient caseloads, hospitals can have data on different combinations of quality measures and achieve a 5-star rating. Moreover, some hospitals might not have complete data for two or three of the heavily weighted quality categories, or could score below the national average in a category, but still receive a 5-star rating.
- Hospitals that earn a 5-star rating generally have better scores in the heavily weighted categories (i.e., mortality, patient experience, safety, and readmission). For example, among hospitals that met the threshold for reporting the safety of care category, 64 percent scored “above the national average.” By contrast, just eight percent of 1-star hospitals received the same score. However, 5-star hospitals did not always significantly outperform other hospitals in the lower-weighted quality categories (effectiveness of care, timeliness of care, and efficiency). For example, 12 percent of 5-star hospitals scored above the national average in the efficient use of medical imaging category, while 10 percent of 1-star hospitals received the same score.
- Scores for individual outcomes measures vary widely. Analysis of the individual measures that comprise the outcomes categories reveals that some measures see greater variation among hospitals than others. Greater variation in a measure could mean more opportunity for hospitals to receive a high score in that area. For example, hospital quality performance varies substantially between 1- and 5-star-rated hospitals for all of the measures in the readmission category but only for one of the 18 measures in the effectiveness of care category.
- Variation in caseloads and the ability to report some measures appear to be tied to performance. Hospitals with smaller caseloads are sometimes missing data for many individual measures, or even entire categories. This could be driving some of the differences in ratings. Regression analyses indicate that reporting on some quality measures is associated with star rating performance—even after controlling for hospital characteristics such as size, location, ownership, and case and payer mix. For example, 5-star hospitals are 16 to 25 percent less likely to report on five of the seven mortality measures and on five of the eight readmission measures compared with 1-star hospitals.
Hospital quality measurement is going to continue, as evidenced by CMS's continued commitment to improving the Star Ratings Program. The Hospital Star Ratings Program was designed to change over time. CMS has already made several updates to the program, dropping seven of the measures between the July and December 2016 reporting periods.
The Star Ratings Program is just one of CMS's initiatives to improve health care quality; hospitals also may be measured as accountable care organizations, through payment incentive programs, and by other payers using different sets of quality measures. Thus, hospitals may be best served by focusing on their own population needs and areas for improvement rather than having the Star Ratings Program drive their agenda.
Our finding that 5-star hospitals report fewer measures than 1-star hospitals, even when we controlled for hospital characteristics, could be a consideration for CMS as it looks to help lower performing hospitals and considers revisions to the Star Ratings Program's risk adjustment methodology.
Read more in: Understanding Medicare's 5-star rating hospital program
