Improving The Accuracy Of Hospital Quality Ratings By Focusing On The Association Between Volume And Outcome

Published in: Health Affairs, Volume 39, Issue 5 (May 2020). doi: 10.1377/hlthaff.2019.00778

Posted on on January 28, 2021

by Laurent G. Glance, Caroline P. Thirukumaran, Yue Li, Shan Gao, Andrew W. Dick

Read More

Access further information on this document at Health Affairs

This article was published outside of RAND. The full text of the article can be found at the link above.

The Centers for Medicare and Medicaid Services (CMS) uses hierarchical modeling to stabilize its hospital quality star ratings by shrinking the performance of low-volume hospitals toward the performance of average hospitals. Responding to criticism that the methodology may distort the performance of low-volume hospitals, a CMS expert panel recommended that the agency consider using "shrinkage targets" to more accurately classify hospital quality performance. To test the "shrinkage targets" approach, we created two parallel sets of performance measures. We found that there was moderate-to-substantial agreement between the standard CMS approach and the approach based on shrinkage targets in hospital star ratings for all but the lowest-volume hospitals. These findings suggest that the standard CMS risk-adjustment methodology does not distort the star ratings of hospitals as long as case volumes exceed the current cutoff (twenty-five cases) used by CMS for public reporting.

Research conducted by

This report is part of the RAND Corporation External publication series. Many RAND studies are published in peer-reviewed scholarly journals, as chapters in commercial books, or as documents published by other organizations.

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.