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Study: Star Ratings Disproportionately Penalize Hospitals Serving the Vulnerable

Iti Madan
January 21, 2020

Hospitals serving vulnerable populations might be judged on social factors outside of their control in the Hospital Compare star rating system, a new analysis from association member University of Chicago shows.

The Centers for Medicare & Medicaid Services (CMS) provides U.S. hospitals with ratings on a scale of one to five stars intended to help patients decide where to seek medical care and to motivate hospitals to improve the quality of their services. Hospital ratings also can affect how insurance companies negotiate contracts for reimbursement, which means that hospitals with lower star ratings see lower reimbursement rates and might be subject to penalties.

The researchers studied 3,608 hospitals nationwide, examining the associations between neighborhood social risk factors (income, marital status, race, language spoken, education, and employment) and seven CMS quality domains (effectiveness of care, efficiency of care, hospital readmission, mortality, patient experience, safety of care, and timeliness of care).

Researchers found that social risk factors most heavily affected timeliness of care, hospital readmissions, and patient experience ratings — factors over which hospitals have little control. On the other hand, social risk factors only minimally affected ratings that hospitals can control, such as safety, efficiency, and effectiveness of care.

The authors of this study believe that a hospital’s quality rating might be tied to its geographic location. Hospitals serving disadvantaged communities already are challenged by social determinants of health, such as housing instability and food insecurity, which make it more difficult for patients to improve their well-being and for hospitals to improve population health.

Essential Hospitals Institute published an October 2019 brief that explains the effect of patient characteristics, hospital characteristics, and the market on Hospital Consumer Assessment of Healthcare Providers and Systems survey scores, which CMS uses to measure patient experience. The brief also provides evidence to demonstrate that the current system — composed of hospital performance measurement and corresponding incentives through the value-based purchasing program — disproportionately penalizes hospitals that treat vulnerable patients due to factors outside the hospital’s control.

Both the research brief and this new study demonstrate the need for CMS and other ratings systems to risk adjust for social determinants of health and use other strategies to ensure fairness and equity.

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