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Market-Based Solutions to Vital Economic Issues


Kenan Institute 2022 Annual Theme: Stakeholder Capitalism
Market-Based Solutions to Vital Economic Issues
Oct 1, 2020

Hospital Star Ratings and Sociodemographics: A Scoring System in Need of Revision


Still in its infancy, the Hospital Compare overall hospital quality star rating program introduced by the Centers for Medicare & Medicaid Services (CMS) has generated intense industry debate. Individual health systems are microcosms of the challenges of ratings and measurement design. Sibley Memorial Hospital, a member of Johns Hopkins Medicine, is a well-run, 288-bed, community hospital located in a wealthy section of northwest District of Columbia with a five-star rating. In contrast, its academic partner, the Johns Hopkins Hospital, a 1,162-bed hospital with a century-long history of innovation situated in an impoverished Baltimore, Maryland, neighborhood, received a three-star rating.

Hospital ratings are the product of an industry in transition: As care delivery has shifted from an individual provider-driven industry to an increasingly scaled systems enterprise, policymakers implemented regulatory standards targeting quality measurement. Subsequent to the National Academy of Medicine’s 1999 report To Err is Human, policy efforts brought public reporting of quality ratings to multiple market segments, including dialysis facilities (2001), nursing homes (2003), Medicare Advantage plans (2007), and physicians (2015). The hospital industry was no exception, and in 2016—with much controversy—CMS launched the hospital star ratings program.

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