How the 5-Star Hospital Rating System Helps Save Time and Money
Updated: Jun 26
Some hospitals have such strong reputations – either for specific specialties or for overall excellence – that they can become “destination” hospitals for people who can choose where to have procedures performed. They may intentionally seek a doctor or surgeon with hospital admitting privileges there.
But that’s not the case for most people. Typically, people will pick their doctor or surgeon first. Then, if they need hospitalization or a procedure, they will go where their provider indicates. Unfortunately, although everyone wants the best care, not everyone considers the hospital’s track record based on objective measures.
Fortunately, the Center for Medicare & Medicaid Services (CMS) has designed a 5-star rating system to help patients choose the hospital most likely to give them the best possible care. (More stars imply better quality care.) In addition, CMS has combined several comparative websites into one Medicare location that provides information on hospitals, physicians, nursing homes, inpatient rehabilitation facilities, hospices and others.
How Original Medicare beneficiaries might use the hospital rating system
Original Medicare members have considerable flexibility when selecting doctors and hospitals. For example, they don’t require a primary care physician’s referral to visit specialists. And they can select any provider who accepts Original Medicare, as long as they are willing to absorb the 20% of the cost of authorized services not covered by Medicare.
That 20% may lead them to research the estimated cost of non-urgent hospitalizations and procedures and then select a doctor or surgeon who practices at the most cost-effective. The relative cost may become more important than the rating of the hospital itself.
But when Original Medicare beneficiaries also have Supplement insurance (Medigap) plans, most or all of the uncovered 20% will be covered, so cost is no longer a driving issue. As a result, members are free to select doctors and surgeons based on where they have hospital privileges. Or they can pick their preferred provider and then use the CMS 5-star rating system to choose the best of the hospitals where that provider practices.
How Medicare Advantage beneficiaries might use the hospital rating system
Medicare Advantage plan members will have to choose from among the primary care physicians within their plan’s network if they want their services covered. And if a specialist is required, members will most likely have to obtain approval from their primary care physician before visiting them.
Doctors often have privileges in more than one hospital. So, before accepting a voluntary or non-urgent hospitalization or procedure, Medicare Advantage members can use the CMS 5-star rating system to research their options and push to be hospitalized at their preferred facility.
How does the 5-star hospital rating work?
CMS’s rating system, which runs between one and five stars, assesses hospitals using two separate ratings.
Overall star rating: This rating reflects how well each hospital has performed a specific set of quality measures compared with other U.S. hospitals. Unfortunately, not all hospitals are rated, including those too new or small to report data on all measures. The final score summarizes the ratings across the following five areas into a single star-based metric:
Safety of care
Timely and effective care
Patient survey rating: This rating measures the hospitalization experiences of recently discharged patients. It uses an extensive survey called the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS). First, star ratings are determined for all ten aspects, then the ratings are summarized into one overall metric. The aspects cover:
Communication with nurses
Communication with doctors
Responsiveness of the hospital staff
Cleanliness of the hospital
Quietness of the hospital environment
Communication about medicines
Overall rating of the hospital
Willingness to recommend the hospital
How can the hospital rating system save you time and money?
Whatever the reason for hospitalization, a Medicare beneficiary will want to receive the best possible care – without complications that could lead to extended in-hospital stays, readmissions, further testing and other time- and cost-generating activities.
An informed choice of hospital can play an essential role in your health care experience in two ways. First, the overall star rating can identify the hospital with the best success rating for medical outcomes. And then, the patient survey rating can identify the hospital where you can have the best personal experience.
So, yes, the CMS hospital rating system can help in decision-making. However, the questions and interpretations undergo constant fine-tuning, which implies that they are not yet fully effective. Besides, not all facilities are rated.
But an imperfect tool is better than no tool at all. Still, it’s important to remember that the use of CMS data in developing the ratings does not constitute an endorsement of any provider by the U.S. Department of Health and Human Services (HHS). Instead, that responsibility remains with the Medicare beneficiary.
Takeaway action step: However you reach the stage of selecting a hospital, before deciding, consult the tool on Medicare’s website called “Find & compare nursing homes, hospitals and other providers near you.”