In Era of Increased Competition, Hospitals Fret Over Ratings

This article originally appeared December 11, 2017 on Kaiser Health News.

By Jenny Gold

CHICAGO — For two years, Saint Anthony Hospital here has celebrated its top-rated “A” grade from the national Leapfrog Group that evaluates hospital safety records. But this fall, when executives opened a preview of their score, they got an unwelcome surprise: a “C.”

Hospitals take their ratings seriously, despite hospital industry experts’ skepticism about their scientific methodology and studies showing that scores may not have a huge influence on patient behavior. In a highly competitive market, no one wants to be a “C”-rated safety hospital any more than a “C”-rated restaurant for cleanliness.

So, the hospital didn’t take its new grade sitting down. It sued the ratings group for defamation, alleging that the grade was based on data that Leapfrog knew to be inaccurate.

“If Leapfrog publishes a ‘C’ grade for Saint Anthony as part of its Fall 2017 Hospital Survey Grades, it will erase years of improvements at the hospital and irreparably degrade the public perception of the hospital,” according to the complaint, which was filed in the Circuit Court of Cook County, Ill. “Saint Anthony competes with other hospitals in the immediate area, including one down the street, and one of the most important ways Saint Anthony recently has been able to distinguish itself is the high safety grades it receives from Leapfrog.”

In a response filed to the court on Tuesday, Leapfrog called Saint Anthony’s lawsuit an “eleventh hour gambit to turn back the clock on a disappointing safety grade based in part on the data that [the hospital] itself provided and certified, and which Leapfrog simply used in accordance with its long-established processes.”

Leapfrog is one of a number of organizations, including U.S. News and World Report, Healthgrades and Consumer Reports, that score hospitals based on whether they meet certain quality measures. Based in Washington, D.C., Leapfrog’s scores are a combination of 27 measures of quality from government data and an independent survey to evaluate things like infections, deaths among surgical patients and how well doctors communicate.

About 50 percent of hospitals participate in Leapfrog’s survey; the others are evaluated based only on publicly available data. Leapfrog’s mission is to help hospitals improve in weak areas and to give patients useful information.

Hospitals are quick to tout good grades on advertising and banners.

Saint Anthony’s complaint appears to be the first time a hospital has sued a rating agency over a contested grade. But in an era when hospitals are brands and patients are customers hoping to make rational purchases for care, such grades and rating systems are likely to face more scrutiny and new pushback.

“In highly competitive markets, hospitals are likely to see poor grades as a challenge, and I think many will be tempted to sue the rating agencies,” said Ashish Jha, a professor at the Harvard T.H. Chan School of Public Health.

Jha, who was on a committee that helped set standards when Leapfrog was established, said he was heartened that hospitals are reacting to data, whatever the impetus. “If they’re going to use that as motivation to get better, that’s perfect,” he said. “As a patient, you don’t care why a hospital is investing in safety, you just care that they are.”

It is unclear to what extent grades influence patient decisions. A Pew Research Center survey from 2012, for example, found that only 14 percent of internet users consulted online rankings or reviews of hospitals or medical facilities.

But Saint Anthony hospital executives insist Leapfrog’s score has an enormous effect on their bottom line. “We have seen, for better or worse, that people are paying a great deal of attention — not only our patients but also our stakeholders, vendors and politicians,” said Dr. Eden Takhsh, the hospital’s chief quality officer. Such scores have also influenced them to focus on improving certain quality metrics, such as rates of sepsis and central line infections.

Leapfrog’s scores are plastered across every newspaper in town, he said. Based on their past “A” grades, Takhsh said, Saint Anthony has been approached by both the University of Chicago and Northwestern, two much larger teaching hospitals in Chicago, to form partnerships in pediatrics and neurology. Both hospitals offered to send their physicians to Saint Anthony to provide subspecialty care, which would provide the small community hospital with more patients and prestige.

A “C” grade could threaten those partnerships. “These organizations don’t want to partner with someone with low quality because it hurts them,” said Takhsh.

Dr. Karl Bilimoria, a professor at Northwestern University in Chicago, said it’s unclear whether ratings ought to have so much influence. “These ratings systems are overall not very good,” he said. “Most of them use data that are generated for billing, so they’re not particularly accurate.”

Major ratings systems “frequently conflict,” because they use different criteria, he said: “A hospital can be rated best on one of them and be rated poorly on another.” Saint Anthony, for example, was rated three out of five stars on Medicare’s Hospital Compare website during the same period that it received an “A” from Leapfrog. The hospital was not included in U.S. News and World Report’s top 22 hospitals in Chicago.

Hospitals can choose to advertise the rating that makes them look best. Patients may be impressed by a hospital’s “Top Hospital” banner but never see the lower scores.

Some ratings groups charge for the display. Leapfrog charges $5,500-$17,600 for a hospital to use its emblem in advertising, depending on the hospital’s size. Others, such as U.S. News and World Report’s “Best Hospitals” program, also levies a fee, but Consumer Reports does not.

The ratings systems differ widely on how they compile their scores, and some are more focused on the quality of care than others. “Leapfrog is the best and the only publicly reported rating focused exclusively on safety. It was developed by top experts and uses the very best publicly available data,” said Leapfrog CEO and President Leah Binder. “Our reviews are scrupulous.”

Saint Anthony’s lawsuit hinges on the question of how its physicians order medications, which Saint Anthony believes was the principal reason for their lower grade. The grade was wrong, the hospital claims, because it is based on an inaccurate assessment that physicians prescribed medications electronically only 50 to 74 percent of the time. Saint Anthony maintains that its physicians in fact prescribe electronically 95 percent of the time. The hospital contacted Leapfrog several times to fix the error but Leapfrog declined, according to the lawsuit.

Leapfrog contends that Saint Anthony did not contact it within the appropriate two week time period, according to Leapfrog’s defense document.

Leapfrog has removed Saint Anthony’s grade for now, but will likely repost it pending further investigation, noting that the electronic ordering issue was unlikely to fully explain the “C” grade.  “There’s clearly some very poor and sloppy reporting from this hospital,” said Binder.

Dr. Karen Joynt Maddox, an assistant professor at the Washington University School of Medicine in St. Louis, said that the dispute underlines the weaknesses of the ratings information available to patients. “This whole field is way behind where it needs to be,” especially given the proliferation of “consumer-driven” high-deductible plans, she said, adding: “there’s a vacuum in terms of consumer-friendly information.”

This story has been updated to reflect a fuller version of Leapfrog’s response to Saint Anthony’s lawsuit.