Daugherty: How to think about hospital rankings

In the past few months alone, the Daily Briefing has reported on hospital ratings released by Consumer Reports, Leapfrog Group, and other services.

The glut of ratings raises two questions. First, is anyone paying attention—beyond largely ambivalent hospital executives?

And second, how much should hospitals care about these rankings?

In an interview with the Daily Briefing's Clare Rizer, the Marketing and Planning Leadership Council's Alicia Daugherty discussed the Advisory Board's research on rankings, addressed some of the criticism that these systems have received, and touched on whether a good rating can lead to a return on investment (ROI).

Q. It seems that the market is absolutely saturated with hospital ratings—from magazines like U.S. News & World Report to federal services like CMS's Hospital Compare website. Why are so many organizations offering ratings?

Daugherty: We now have online ratings for so many things, which means that consumers are growing accustomed to using ratings in order to make personal decisions.

Some of these organizations also saw a market opportunity to charge providers to use the rating on their website or on a billboard.

Q: Let's talk about how these groups differentiate themselves in a saturated market. According to criteria published by the Association of American Medical Colleges (AAMC), there needs to be "meaningfulness, transparency, and validity in quality rating systems," and each rating system should have a clear and concise purpose statement. Can you translate that for our readers—basically, what is AAMC asking for?

Daugherty: The AAMC is asking each group to explicitly state what the purpose of its particular rating will be.

For instance, is this a system that will help patients decide where to go for a procedure? Is it intended to help providers understand where they need to focus their quality improvement efforts? Is the rating created to help employers choose the providers they want to include in their narrow networks?

In a well-designed rating system, the purpose should be clear. And then depending on the rating's purpose, the group would use a tailored, distinct methodology to get to a unique and useful answer.

Q. Given the many different kinds of ranking methodologies and the different weights being places on aspects of hospital care, have you seen evidence of hospitals trying to 'game the system' at all?

Daugherty: That's an interesting question. I haven't heard of organizations purposely undertaking care improvement efforts specifically to enhance their scores on these ratings systems.

Certainly, executives have told me that the ratings can be a form of motivation for staff—being recognized for excellent quality or significant improvements is a nice reward—but that's not what's driving improvement initiatives. Rather, they're doing it to improve care quality for patients and to better position the organization for value-based purchasing initiatives. Plus, given how regularly the criteria and weightings change, it would be difficult to keep changing your quality improvement strategy.

Q. So if hospitals aren't proactively reacting to the ratings, what do you see as the future of such systems? How might they change in the coming years?

Daugherty: The rating systems are beginning to focus more on individual providers, but when we look at data on how consumers choose hospitals, the trend is actually in the other direction.

There's some data suggesting that while baby boomers choose their doctor first and then will go to the hospital that their doctor recommends, younger generations are more likely to choose a hospital first and then find a doctor affiliated with that hospital.

How we're going to measure virtual care quality is also pretty interesting. For instance, are we going to have rating systems for e-visits?

Q. Perhaps in the next five or 10 years, could these ratings become more important to a younger generation that is choosing hospital systems over individual clinicians?

Daugherty: Definitely. The winners will likely be those more synthesized rating systems that combine multiple types of metrics—quality, price, access—into intuitive, easy-access displays. [They will also be] systems that are affiliated with a health plan or an employer.

Q. Overall, is it worth it for hospitals to pay to use the ratings in their ads?

Daugherty: In general… many organizations feel pushed into participating in the systems and investing in using the ratings in advertisements, because their competitors are doing it.

But I would encourage our members to think very carefully before making this decision; it's very hard to measure ROI off of this type of investment, whereas there are other marketing investments that hospitals can make that offer more visible ROI and also help to differentiate them more than an award would.

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