Michigan hospitals serving distressed areas tend to earn lower quality scores.
That’s the finding of an Ann Arbor-based business-labor coalition that underscores the need for the health care industry to take a much closer look at a federal ratings system for hospitals.
The report by the Economic Alliance for Michigan suggests that socioeconomic factors skewed the ratings that some hospitals received this year from the federal Centers for Medicare and Medicaid Services (CMS).
According to the Economic Alliance analysis, hospitals that received one star in the CMS ratings issued last July served a patient population with a median income of $20,697 less than five-star hospitals. Their patients also were more often African Americans, had higher poverty and unemployment rates, and included fewer high school graduates. Those one-star hospitals provided 9.4 percent more uncompensated care, as well as treated 36 percent fewer people with private insurance.
“Initial research and findings indicate that socioeconomic factors do indeed impact hospital quality of care and patient safety,” the report’s authors wrote. “Further research is needed to fully understand the reasons why Michigan’s one-star rating hospitals are closely tied to the poorer areas of the state.”
The Economic Alliance for Michigan conducted the analysis after a Bloomberg News report in September suggested the CMS star ratings system skewed lower for hospitals serving poor areas, both rural and urban.
The findings point to a need for CMS to look far deeper into the issue and to improve the system by risk adjusting the more than 60 measures used for star ratings. Those measures should include more socioeconomic factors that some hospitals face in their markets, said Economic Alliance President Bret Jackson.
“CMS needs to figure out why that is and how to fix it to put hospitals on a level playing field,” Jackson said. “It just can’t be that all of these hospitals in these socioeconomically distressed areas are all bad. That doesn’t make sense.”
Jackson does not advocate getting rid of the CMS star rating system. He notes that some hospitals that received a low score overall did perform well in specific areas.
Any adjustment to the ratings system needs to ensure that hospitals “are graded in a way that you can compare apples to apples,” Jackson said.
“We don’t want to throw the baby out with the bath water,” he said. “We want to make sure it is treating all hospitals fairly.”
Risk adjusting the star rating system methodology has gained some traction. The 21st Century Cures Act going through Congress includes language that would adjust readmissions data to account for socioeconomic status in a given hospital’s market.
How CMS comes up with its star ratings is important because hospitals that score poorly face reductions in Medicare and Medicaid payments, which essentially would punish them for issues affecting patients’ health that hospitals cannot directly control.
Even then, adjusting scores for risk won’t necessarily correlate to better health and quality, said Laura Appel, a senior vice president and chief innovation officer at the Michigan Health & Hospital Association. That needs to come from more outreach and enabling people to better care for their own health or manage their conditions if they have chronic diseases, Appel said.
“We haven’t figured out the real symbols of true health and we are loath to look beyond the health care system, which is exactly what this Economic Alliance report is pointing out,” Appel said. “There’s all of this stuff that happens outside of the four walls of a hospital, and if we don’t address it outside of the four walls of the hospital, it really doesn’t matter what we do on these quality scores. We haven’t gotten to the health status issue.”
Overall, the Economic Alliance analysis affirms the Health and Hospital Association’s view that socioeconomic factors do affect a hospital’s quality scores, Appel said. She cites similar studies by Henry Ford Health System in Detroit that point to the same conclusion.
In the most recent study involving 657 hospitals, researchers noted a “significant correlation was found between the star rating and the overall stress ranking” of communities served by hospitals that received low scores.
Editor’s note: The 2016 star ratings for individual hospitals are available at medicare.gov/hospitalcompare.