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The Value of Hospital Ratings in Healthcare Administration

Despite controversy surrounding data-gathering methods, high ratings are often used in advertising campaigns, while low ratings can provide an opportunity for change.

We use ratings to pick restaurants, buy products, and book hotels. We can also use ratings to choose a hospital.

There are four well-known public hospital rating systems: U.S. News & World Report’s Best Hospitals, the Centers for Medicare and Medicaid Services’ (CMS) Overall Hospital Quality Star Rating, Leapfrog’s Safety Grade and Top Hospitals, and Healthgrades’ America’s Best Hospitals. The ratings are meant to allow consumers to compare hospitals and make informed decisions about where to obtain non-emergency healthcare. The ratings are also used in pay-for-performance programs and patient referral decisions.

The CMS Overall Hospital Quality Star Rating, for one, uses data reported by hospitals to score them among dozens of measures in five areas of quality. Those five areas are patient safety, readmission, patient experience, mortality, and timely and effective care. CMS then calculates a weighted average across those five areas to come up with a single summary score.1 In April 2021, CMS awarded one to five stars to more than 4,500 hospitals. More than 1,000 hospitals earned a three-star rating. Fewer than 500 earned five stars, and 204 achieved just one star.2

However, the ratings are controversial. The American Hospital Association says, “CMS’s flawed approach to star ratings … provid[es] an inaccurate, misleading picture of hospital quality.”3 In 2019, a six-person team of hospital officials reviewed the various ratings systems and reported finding limited data and measures, minimal data audits, and a lack of formal peer reviews.4 A 2015 review of hospital rating systems found that of 844 hospitals rated as high-performing by one rating system, only 10% received the same rating among any of the other rating systems.5

Nonetheless, hospital ratings are released to wide media coverage. Ratings are easily found on the internet. Savvy marketers use high ratings to promote their hospitals. Hospitals that receive top ratings trumpet the news to potential patients and partners.

Receiving a low hospital rating can spark concern from board members and patients. But hospital administrators whose hospitals have received a low rating can use the information as an opportunity to identify areas for improvement and to create plans for increasing their rating. Healthcare administrators can also push for investments in technology and tools that help measure performance. If individual clinicians better understand their performance in key areas measured by hospital ratings systems, they may be able to help hospitals improve their overall quality. A poor rating can be a good opportunity to create, promote, and embrace a culture of quality.

If you want to become a leader in quality healthcare administration, Walden University’s Master of Healthcare Administration (MHA) program can help you reach your goals. Combine your healthcare experience with essential business skills as you prepare to take on a leadership role in healthcare administration.

You can earn your MHA degree while continuing to work full time, because Walden’s online degree program is specifically designed for working professionals. And Walden is one of the top granters of healthcare administration master’s degrees in the U.S.6

Walden University is an accredited institution offering a Master of Healthcare Administration (MHA) degree program online. Expand your career options and earn your degree using a convenient, flexible learning platform that fits your busy life.

1Source: data.cms.gov/provider-data/topics/hospitals/overall-hospital-quality-star-rating
2Source: www.healthcarefinancenews.com/news/cms-releases-hospital-quality-star-ratings
3Source: www.aha.org/star-ratings/home
4Source: catalyst.nejm.org/doi/full/10.1056/CAT.19.0629
5Source: www.healthaffairs.org/doi/full/10.1377/hlthaff.2014.0201
6Source: National Center for Education Statistics (NCES) IPEDS database from 2013–2019. Based on the most recent year of completions survey data available, using CIP code 51.0701 “Master’s degree – Health/Health Care Administration/Management” for Master’s degrees (Award level 7). Available at https://nces.ed.gov/ipeds/use-the-data. (Retrieved July 2021; may consist of or include provisional release data.)

Walden University is accredited by The Higher Learning Commission, www.hlcommission.org.

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