Changes in Consumer Demand Following Public Reporting of Summary Quality Ratings: An Evaluation in Nursing Homes

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Abstract

<div class="section"> <a class="named-anchor" id="hesr12459-sec-0001">  </a> <h5 class="section-title" id="d4851985e222">Objective</h5> <p id="d4851985e224">Limited consumer use of health care report cards may be due to the large amount of information presented in report cards, which can be difficult to understand. These limitations may be overcome with summary measures. Our objective was to evaluate consumer response to summary measures in the setting of nursing homes. </p> </div><div class="section"> <a class="named-anchor" id="hesr12459-sec-0002">  </a> <h5 class="section-title" id="d4851985e227">Data Sources/Study Setting</h5> <p id="d4851985e229">2005–2010 nursing home Minimum Data Set and Online Survey, Certification and Reporting ( <span style="fixed-case">OSCAR</span>) datasets. </p> </div><div class="section"> <a class="named-anchor" id="hesr12459-sec-0003">  </a> <h5 class="section-title" id="d4851985e235">Study Design</h5> <p id="d4851985e237">In December 2008, Medicare converted its nursing home report card to summary or star ratings. We test whether there was a change in consumer demand for nursing homes related to the nursing home's star rating after the information was released. </p> </div><div class="section"> <a class="named-anchor" id="hesr12459-sec-0004">  </a> <h5 class="section-title" id="d4851985e240">Principal Findings</h5> <p id="d4851985e242">The star rating system was associated with a significant change in consumer demand for low‐ and high‐scoring facilities. After the star‐based rating system was released, 1‐star facilities typically lost 8 percent of their market share and 5‐star facilities gained over 6 percent of their market share. </p> </div><div class="section"> <a class="named-anchor" id="hesr12459-sec-0005">  </a> <h5 class="section-title" id="d4851985e245">Conclusions</h5> <p id="d4851985e247">The nursing home star rating system significantly affected consumer demand for high‐ and low‐rated nursing homes. These results support the use of summary measures in report cards. </p> </div>

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Most cited references 14

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The Public Release of Performance Data

Martin N Marshall, Paul Shekelle, Sheila Leatherman … (2000)

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Association between Medicare Advantage plan star ratings and enrollment.

O Reid, William H Shrank, Katherine Howell … (2013)

The US Centers for Medicare & Medicaid Services publishes star ratings reflecting Medicare Advantage plan quality to inform enrollment decisions. To assess the association between publicly reported Medicare Advantage plan quality ratings and enrollment. Cross-sectional study of 2011 Medicare Advantage enrollments among 952,352 first-time enrollees and 322,699 enrollees switching plans. Association between star ratings and enrollment was modeled using conditional logit regression, controlling for beneficiary and plan characteristics. Among the 952,352 included first-time enrollees, a 1-star higher rating was associated with a 9.5 (95% CI, 9.3-9.6) percentage-point increase in likelihood to enroll. The highest rating available to a beneficiary was associated with a 1.9 (95% CI, 1.8-2.1) percentage-point increase in likelihood to enroll. Among the 322,699 enrollees switching plans, a 1-star higher rating was associated with a 4.4 (95% CI, 4.2-4.7) percentage-point increase in likelihood to enroll. A rating at least as high as a beneficiary's prior plan was associated with a 6.3 (95% CI, 6.0-6.6) percentage-point increase in likelihood to enroll. Star ratings were less strongly associated with enrollment for black, rural, low-income, and the youngest beneficiaries. Medicare's 5-star rating program for Medicare Advantage is associated with beneficiaries' enrollment decisions.

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Do consumers respond to publicly reported quality information? Evidence from nursing homes.

Rachel M Werner, Edward C Norton, R Konetzka … (2012)

Public reporting of quality information is designed to address information asymmetry in health care markets. Without public reporting, consumers may have little information to help them differentiate quality among providers, giving providers little incentive to compete on quality. Public reporting enables consumers to choose highly ranked providers. Using a four-year (2000-2003) panel dataset, we examine the relationship between report card scores and patient choice of nursing home after the Centers for Medicare and Medicaid Services began publicly reporting nursing home quality information on post-acute care in 2002. We find that the relationship between reported quality and nursing home choice is positive and statistically significant suggesting that patients were more likely to choose facilities with higher reported post-acute care quality after public reporting was initiated. However, the magnitude of the effect was small. We conclude that there has been minimal consumer response to information in the post-acute care market. Published by Elsevier B.V.