Nursing 5 Star Rating

1. 1R. Tamara Konetzka (konetzka{at}uchicago.edu) is an associate professor of health services research in the Department of Public Health Sciences at the University of Chicago, in Illinois.
2. 2David C. Grabowski is a professor of health care policy at Harvard Medical School, in Boston, Massachusetts.
3. 3Marcelo Coca Perraillon is a PhD candidate in the Department of Public Health Sciences at the University of Chicago.
4. 4Rachel M. Werner is an associate professor of medicine at the University of Pennsylvania, in Philadelphia.

1. *Corresponding author

Abstract

Market-based reforms in health care, such as public reporting of quality, may inadvertently exacerbate disparities. We examined how the Centers for Medicare and Medicare Services’ five-star rating system for nursing homes has affected residents who are dually enrolled in Medicare and Medicaid (“dual eligibles”), a particularly vulnerable and disadvantaged population. Specifically, we assessed the extent to which dual eligibles and non–dual eligibles avoided the lowest-rated nursing homes and chose the highest-rated homes once the five-star rating system began, in late 2008. We found that both populations resided in better-quality homes over time but that by 2010 the increased likelihood of choosing the highest-rated homes was substantially smaller for dual eligibles than for non–dual eligibles. Thus, the gap in quality, as measured by a nursing home’s star rating, grew over time. Furthermore, we found that the benefit of the five-star system to dual eligibles was largely due to providers’ improving their ratings, not to consumers’ choosing different providers. We present evidence suggesting that supply constraints play a role in limiting dual eligibles’ responses to quality ratings, since high-quality providers tend to be located close to relatively affluent areas. Increases in Medicaid payment rates for nursing home services may be the only long-term solution.

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