Simplified Nursing Home Compare ratings help consumers make better choices

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Researchers at the Colorado School of Public Health found that the increased use of composite ratings, such as the Five-Star Quality Rating System, leads more people to use the system to compare and choose better-suited providers.

Health economists and policy makers have struggled to judge whether public reporting of quality information actually works in the absence of experimental data.

In his study, published late last year in the American Journal of Health Economics, health economist Marcelo Perraillon used a statistical method called regression continuity to show that consumers are indeed using the data to inform better decisions about care.

"At face value, it seems reasonable that consumers or their families will respond by choosing providers (hospitals, nursing homes, etc.) of better quality," Perraillon said in a press release, noting that the rating are intended to spur higher quality care. “Essentially, we used a statistical design that allowed us to create an experiment in order to show that consumers and their families do respond to public reporting of nursing homes quality information."

The results show nursing homes that obtained an additional star on the one-to-five scale had more admissions. But not all consumers responded to the change the same way, particularly in their view of  low-rated nursing homes providing service in poorer areas which take mostly Medicaid patients.

"Disparities in quality of care and access is an ongoing problem in the nursing home market. Our results suggest that potential patients of lower rated nursing homes have fewer choices and they (might) not benefit from ratings. In fact, ratings could lead to even more disparities," Perraillon said. "These nursing homes tend to be crowded already so managers don't care much about their ratings. Poorer patients don't have a lot of options."

Another study on the provider-side perspective is expected in 2018.