New York Times story questions Obamacare’s nursing-home ratings

Facilities have learned to game the system, so five stars may not mean much

Katie Thomas’ piece in Monday’s New York Times undermined what has become a pillar of the standard nursing-home story of late: the government’s five-star rating system that supposedly helps consumers separate the good facilities from the bad. Thomas’ analysis of government data suggests that the system may be flawed, offering a false sense of security to anyone who relies on it to select a nursing home. As the government turns increasingly to such ratings in an effort to bring transparency to the healthcare system, Thomas’ reporting illustrates the need for close media scrutiny of other such schemes. For that, she deserves a CJR laurel.

Her story centers on Rosewood Post-Acute Rehab, a Sacramento nursing home, and the government’s relatively new five-star rating system that is supposed to guide nursing home shoppers to the best facilities. According that system, Rosewood is a five-star facility. Yet Thomas reports that it has been “the subject of about a dozen lawsuits in recent years from patients and their families claiming substandard care.” After interviewing current and former patients, their families, and examining statements from former employees, Thomas discovered that residents live three to a room, and that both quality staff and basic supplies, like washcloths, were in short supply.

John L. Sorensen, chief executive of North American Health Care, the chain that operates Rosewood, disagreed that the facility doesn’t deserve its high government rating. “While we have had a few problems, they’re pretty minor compared to the overall accomplishments and tremendous customer satisfaction that’s being provided,” he told the Thomas.

Thomas reported that nursing homes have learned to game the system, a hazard that comes with any rating scheme. She notes that nationally, the proportion of homes with above-average ratings has risen from 37 percent in 2009, when the program began, to 50 percent in 2013. One of the easiest ways to inflate a score is through manipulating staffing levels. Facilities get an extra star in the rating system if they receive four or five stars for staff. Studies have shown that the number of staff—nurses, aides, etc.—has a bearing on the quality of care at a facility. Thomas notes that facilities will sometimes staff up prior to a state inspection, the reduce staff afterward. One Long Island nursing home described this process as “our Super Bowl.”

The Affordable Care Act pushes the government to be more transparent on healthcare issues, and this year Medicare is planning to release star ratings for home-care agencies, dialysis centers, and hospitals. But Thomas’ findings suggest that journalists need to be careful how they use these data. According to her report, two-thirds of the 50 or so nursing homes on Medicare’s “watch list,” which identifies facilities that need to improve the quality of their care, have four- or five-star ratings.

(And this isn’t the first warning that government ratings for healthcare operations might not be a reliable guide. The ACA also mandated that Medicare pay bonuses to health insurers whose Medicare Advantage plans scored four out of five stars on quality measures, such as how well they monitor diabetics. But a few years ago, the agency decided to give bonuses to plans that receive three stars. In other words, mediocre plans got rewarded, too.)

Thomas made another important point. The nursing-home industry, which initially opposed the ratings, now embraces them. “Receiving a high star rating has never been more important to nursing homes,” she wrote. In addition to families looking for a place to put their elderly loved ones, the ratings are used as guides by insurers, doctors, and hospitals discharging patients, as well as by lenders and investors looking for a safe bet. History has shown that the usefulness of consumer information is directly proportional to how much the industry being rated squeals. If there’s not much squealing, it’s likely that the ratings don’t accurately reflect conditions, warts and all. The Times story makes this clear.

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Trudy Lieberman is a longtime contributing editor to the Columbia Journalism Review. She is the lead writer for The Second Opinion, CJR's healthcare desk, which is part of our United States Project on the coverage of politics and policy. She also blogs for Health News Review. Follow her on Twitter @Trudy_Lieberman.