Medical Economics

The 2017 Medicare Hospital Star Ratings: Better But Still Not Perfect

Two years ago, I wrote a (rather scathing) post about the 2016 Medicare star rating system for hospitals. Last January, I posted an update about the 2017 star ratings. The 2017 star ratings were supposed to be published last summer but Medicare delayed the release in order to revise the methodology and address some of the criticisms in the original formula. The 2017 star ratings were released this past winter and we anticipate the new ratings to be released in the next 2 months. Since the 2017 star rating was released, there has been more of an opportunity to evaluate who the star winners and losers were.

In 2016, there were 62 measures across 7 groups of quality markers and hospitals reported only those measures that pertained to their patients. Smaller and specialty hospitals that take care of more selective groups of patients reported smaller numbers of measures. For example, an orthopedic specialty hospital would not report on obstetric care measures since no obstetric care is delivered in that hospital. In an analysis of the 2016 star ratings, an article in JAMA determined that there was in inverse relationship between the number of measures that a hospital reports on and the number of stars that a hospital was awarded. In other words, the more measures reported, the lower the number of stars Medicare awarded those hospitals. There were two ways to interpret this data: either smaller and specialty hospitals provide better care to patients or the equation that Medicare used to determine the star rating was flawed.

The 2017 star rating system improved on the 2016 system with the result that there were more hospitals with 1 or 5 stars and fewer with 3 stars, thus decompressing the center of the rankings. However, once again, specialty hospitals reported only about half the average number of measures as major teaching hospitals (27.2 versus 51.4) but had significantly higher star ratings than major teaching hospitals. In all, 83% of specialty hospitals received a 4 or 5 star rating whereas 24% of major teaching hospitals received 4 or 5 stars.

It appears that how the different measures are weighted affects results significantly so that some hospitals can appear to be better or worse performers than they really are. Teaching hospitals care for a completely different population of patients than specialty hospitals – the patients are sicker, have different medical/surgical conditions, and have longer average lengths of stay. Patients at a tertiary care academic medical center have a higher mortality rate and readmission rate than patients at an orthopedic specialty hospital.

The 2018 Medicare star ratings will be released next month. We’ll have to wait to see if the formula improves over last year’s.

June 10, 2018

By James Allen, MD

I am a Professor Emeritus of Internal Medicine at the Ohio State University and former Medical Director of Ohio State University East Hospital