CH B AR THE LEONARD DAVIS INSTITUTE R ES E RI EF of HEALTH ECONOMICS Penn LDI 20 4 16 . - No Changes in Consumer Demand Following Public Reporting of Summary Quality Ratings: An Evaluation in Nursing Homes Rachel M. Werner, R. Tamara Konetzka, Daniel Polsky Health Services Research, February 2016, Online First KEY FINDINGS: A nursing home report card that converted 12 measures of quality into a simple 5-star system significantly affected LDI RESEARCH BRIEF consumer demand for low- and high-scoring facilities. One-star facilities typically lost 8 percent of their market share and 5-star facilities gained more than 6 percent of their market share. These results support the use of summary measures in report cards. THE QUESTION Although nursing home ratings have been publicly available since 2002, initially they had little impact on consumer choices. The original report cards in Nursing Home Compare presented consumers with a large amount of information, which can be difficult to understand. In December 2008, Medicare converted its nursing home report card to a 5-star summary rating. In this study, LDI Senior Fellows Rachel Werner and Daniel Polsky, and their colleague R. Tamara Konetzka, tested whether this change was associated with a change in consumer demand for nursing homes related to the nursing home’s Percent of Nursing Home Admissions in Each Star Category star rating after the summary information was released. [The vertical line represents the release of the 5-star report card in December 2008] Source: Health Services Research, Feb 11, 2016; 1475-6773 DOI: 10.1111/1475-6773.12459 THE FINDINGS After adjusting for other variables, the researchers found that In a study of more than 16,000 nursing homes and 2.3 the report card was associated with a relative reduction in million admissions between 2005-2010, the authors found market share of 8 percent for 1-star facilities and an increase that the percentage of admissions to nursing homes ranked in market share of 6.4 percent in 5-star facilities, but relatively as 4 or 5 star increased beginning in early 2009, shortly small changes in market share for the 2-, 3-, or 4-star facilities. after the 5-star rankings were released. Simultaneously, the percentage of admissions to 1-star nursing homes declined. Research to Improve the Nation’s Health System. DATA DRIVEN. POLICY FOCUSED. ldi.upenn.edu THE IMPLICATIONS likely to be not for profit (43.7 percent vs. 13.8 percent), had higher percent of Medicaid residents (31.8 percent vs. 16.5 percent), and This study is the first to document changes in consumer demand slightly lower occupancy rates (82.0 percent vs. 79.7 percent). in response to a change to a summary rating system. The study was able to isolate the effect of moving to a summary measure The researchers measured each nursing home’s 5-star rating in of quality, because the detailed quality data were available for both the pre- and postreporting period, which enabled them to 6 years prior to the release of the summary and continued to be control for the correlation between knowledge of the nursing available on the same website. home market through other pathways (market learning) and report card quality. They controlled for other factors that might drive Public and private payers are moving toward more widespread demand, including nursing home characteristics that are used as adoption of summary measures, replacing systems based on signals of quality, distance to a nursing home, and bed availability. numerous individual quality metrics to ones focusing on star- They estimated the report card effect by testing for changes in the based ratings. These findings suggest that the transformation correlation between consumer demand and report card scores once of complex rating systems can help consumers incorporate the the summary information was publicly available. information into their decisions. Increased consumer use of LDI RESEARCH BRIEF Werner RM, Konetzka RT, Polsky D. Changes in Consumer Demand public report cards may in turn provide a stronger incentive for Following Public Reporting of Summary Quality Ratings: An Evaluation in providers to deliver high-quality (or highly rated) care. Nursing Homes. Health Services Research, Published Online February 11, 2016 DOI: 10.1111/1475-6773.12459 This analysis provides important new results indicating that consumers use nursing home star ratings to choose a nursing home. Prior report cards may not have successfully conveyed LEAD AUTHOR: DR. RACHEL M. WERNER the complex information required to make informed decisions in a way that is understandable to consumers. The use of Rachel Werner, MD, PhD is an Associate Professor summary scores may increase consumer comprehension of and of Medicine and Associate Chief for Research response to report cards. in the Division of General Internal Medicine at Penn and Core Investigator with the VA HSR&D Center for Health Equity Research and Promotion THE STUDY (CHERP). Dr. Werner’s research seeks to understand the effect The authors used the 2005–2010 nursing home Minimum Data of health care policies and delivery systems on quality of care. Set and Online Survey, Certification and Reporting (OSCAR) In particular, she has examined the role of quality improvement dataset to compare the relationship between nursing home incentives on provider behavior, the organization of health demand and nursing home 5-star ratings before and after these care, racial disparities, and overall health care quality. She has ratings were publicly released. The study included 16,147 investigated numerous unintended consequences of quality nursing homes and 2,316,649 nursing home admissions improvement incentives and was among the first to recognize between 2005 and 2010, 92 percent of whom are admitted to that public reporting of quality information may worsen racial postacute care (rather than long-term care). Compared to 1-star disparities. nursing homes, 5-star nursing homes were less likely to be part of a chain (63.5 percent of 1-star nursing homes vs. 39.2 percent of 5-star nursing homes), smaller (85 beds vs. 125 beds), more Connect With Us: ldi.upenn.edu Since 1967, the Leonard Davis Institute of Health Economics (LDI) has been the leading university institute dedicated to data-driven, • ldi.upenn.edu/health-policysense policy-focused research that improves our nation’s health and health • @PennLDI care. Originally founded to bridge the gap between scholars in • www.youtube.com/user/LDIvideo business (Wharton) and medicine at the University of Pennsylvania, LDI now connects all of Penn’s schools and the Children’s Colonial Penn Center Hospital of Philadelphia through its more than 200 Senior Fellows. 3641 Locust Walk Philadelphia, PA 19104-6218 LDI Research Briefs are produced by LDI’s policy team. 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