Abstract
ABSTRACT: The Center for Medicare and Medicaid Services (CMS) has made several refinements to their model for calculating hospital quality star ratings (Hospital Compare) amidst criticism and evidence of bias against some institutions. We argue that the CMS model does align with important internal quality metrics and encourage a measured approach to redesign, potentially using categorizations or tiers, rather than a complete abandonment of the ratings system. We find that institutional characteristics (available resources, average severity of illness, and academic affiliation) are associated with internal quality metrics related to patient flow. Furthermore, regression results from the original and revised CMS star rating methodologies suggest that patient flow metrics (discharges before noon [p < .01] and weekend discharges [p < .001]) have a positive relationship with the Hospital Compare rating. Hospitals with better patient flow, as measured by higher levels of discharges before noon and weekend discharges, are associated with higher CMS quality ratings. These findings suggest that CMS star ratings do reflect key aspects of operational performance, specifically efforts to improve patient flow, but the ranking system should consider hospital characteristics that influence internal operations as we move toward a system capable of quality and price transparency for consumers.