‘SNF Star Ratings Matter’: Nursing Homes with High Ratings Produce Better Outcomes

Despite ongoing debate about the data used to calculate the federal government’s five-star ratings for nursing homes, a new study found that higher-rated skilled nursing facilities produce better outcomes for residents.

Properties with higher ratings on provider performance report cards outperform lower-ranked SNFs on a variety of metrics, researchers from the National Bureau of Economic Research (NBER) concluded.

“We find that discharge to a higher-star SNF led to significantly lower mortality, fewer days in the nursing home, fewer hospital readmissions, and more days at home or with home health care during the first six months post-SNF admission,” the researchers wrote in the June paper. “SNF star ratings matter for patient outcomes.”


The team focused on the overall Five-Star Quality Care Rating on the consumer-facing Nursing Home Compare Report Card. Provided by the Centers for Medicare and Medicaid Services (CMS), the report card consists of individual ratings for health inspections, staffing, and quality measures.

Previous researchers have questioned the validity of the Nursing Home Compare measures, the authors — including David Grabowski, a member of the Medicare Payment Advisory Commission (MedPAC) — noted. A study published last November in the journal Health Affairs found that there was little difference in resident safety between buildings along the five-star scale, while another analysis by the Cambridge, Mass.-based firm PointRight determined that higher ratings didn’t always correlate with lower rehospitalization rates.

And another study published in The Journal of Health Care Organization, Provision, and Financing last year found that improvements in nursing home star ratings weren’t matched by improvements in potentially preventable hospitalizations.


But the NBER group’s analysis — based on 1.3 million SNF residents who had been discharged from a hospital between January 2012 and June 2013 — revealed some direct connections between star ratings and quality. For instance, choosing a five-star SNF over a one-star building reduced the incidence of 30-day mortality by 2 percentage points and 180-day mortality by 4.5 percentage points, while also lowering the chances of a long-term nursing stay by 4 points.

The star-rating effect comes with a curious, if intuitive, caveat: The more stars a SNF has, the less overall skilled nursing usage a resident will see.

“The effect of an increase in star rating increases the chance of being at home, and that effect gets gradually stronger,” the team wrote. “Higher rated SNFs also increase the use of home health, lower the use of SNFs, and lower the probability of death. These results are not short run; they get larger in magnitude and stronger in statistical significance over time.”

For the authors of the NBER paper, one major question was whether a patient choosing a SNF with a higher star rating is less likely to have adverse outcomes, or whether that rating just reflects a better mix of past patients or strong performance on measures the patient does not value.

They stressed that the greatest challenge of evaluating the star ratings was overcoming the issue of patients selecting into certain facilities through internal factors, rather than because of the star ratings; in other words, higher quality ratings could result from a healthier mix of patients choosing those facilities.

“Our results show a strong causal effect in the expected direction,” the team wrote. “Our instrument identifies variation in star rating both from within-provider change in star rating and from patients who go to a different facility because of changes in relative distances of each quality rating.”

The star ratings and Nursing Home Compare have made headlines in both the trade press and the mainstream media in recent months, with CMS rolling out a variety of changes to the calculations — including stricter staffing standards and new separate metrics for short- and long-stay residents. The agency also came under fire when a pair of U.S. senators released a previously internal list of buildings considered for inclusion in the Special Focus Facilities program, a group of the 88 most troubled properties in the country.

About half of those properties had at least three stars on the quality and staffing portions of their report cards, leading the senators to call into question the veracity of the five-star system.

“Some nursing homes that are part of the Special Focus Facility candidate list have had higher star ratings in the categories potentially related to quality and nursing home staffing, and we understand that that can be confusing sometimes to consumers,” CMS chief medical officer Kate Goodrich said in response to the criticism.

While later vowing to make that candidate list public, CMS officials repeatedly pointed to Nursing Home Compare as the more accurate barometer of a facility’s overall performance, along with other more old-fashioned methods of evaluating a property.

“CMS urges every American to consult their doctors, their families, and loved ones, and Nursing Home Compare before making decisions about nursing home care,” Goodrich said.

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