What’s it worth? Researchers examine how patients value star ratings in health care

Professor and Chair of Information Systems Raghu Santanam and research colleagues overwhelmingly found that patients are willing to pay more for higher-quality health care based on star ratings.

The star system, often based on a five-number scale, is widely used across industries to help consumers decide if something is worth its quality reputation. As it goes, the higher the star rating the better the buyer response.

Restaurants, hotels, car manufacturers, and just about every market sector rely on such metrics to gauge customer satisfaction with specific products and services.

In health care, particularly in the past decade, clinical quality star ratings have become increasingly more popular to determine patient satisfaction with hospitals and surgeons. But how do patients value additional stars — and what factors influence their decision-making when it comes to choosing providers based on such systems?

That’s the question posed by a group of researchers including Raghu Santanam, professor and chair of the Department of Information Systems, along with colleagues Adam Schwartz, Kathleen J. Yost, Kevin J. Bozic, David A. Etzioni, and Irfan Emrah Kanat. The results of their research, “What Is the Value of a Star When Choosing a Provider for Total Joint Replacement? A Discrete Choice Experiment,” appeared recently in Health Affairs.

Patients are star-struck by health care

To understand how patients interpret star ratings, the researchers polled 200 participants, from age 36 to 91, with joint pain in an academic orthopedic outpatient setting about hypothetical hip and knee replacement surgery.

“Since the passage of the Affordable Care Act, there’s been an explosion of quality metrics by which patients, payors, and health systems rate providers. Most of those systems are created from a payor-provider-hospital perspective, not from a patient perspective,” explains Schwartz, MD, MBA, associate professor of orthopedic surgery at the Mayo Clinic College of Medicine and Science and a consultant in the Department of Orthopedic Surgery, Mayo Clinic in Phoenix.

Our interest in this study was to ask patients what they think about the quality and how they value it. A good way to evaluate that is through a discrete choice experiment in a realistic scenario with patients with joint pain looking to have joint surgery, and ask, given the options, which do you chose over the others?

– Adam Schwartz, MD, MBA, associate professor of orthopedic surgery at the Mayo Clinic College of Medicine and Science and a consultant in the Department of Orthopedic Surgery, Mayo Clinic in Phoenix

With this method, according to Schwartz, the researchers were able to calculate the trade-offs, such as out-of-pocket expenses and travel costs, patients would make based on star ratings.

“Their preferences were implied by choice,” says Schwartz. “We think we know what quality is, the people who make the star rating systems think they know, providers think they know, but what do patients think quality is? They have a choice between hospital A with three stars and hospital B with five stars.

“What are the trade-offs they are willing to make between three stars and five stars? The uniqueness of the study is that we were able to quantify that and determine the internal calculation a patient makes when they choose between star ratings.”

One of the more significant findings the researchers discovered is that a higher star rating was certainly worth the price of joint surgery admission for the study participants. The average patient was willing to pay $2,607 and $3,152 extra for an additional hospital or physician star, respectively.

What are star ratings in health care worth?

Travel distance also was a sticking point for prospective patients when weighing the value of a star against decisions to receive care. The typical study participant preferred to spend some cash rather than hit the road to chase a higher star rating.

For example, the average patient was willing to pay an extra $11.45 to reduce travel by every extra mile for arthroplasty care. Older patients, however, were more likely to make the road trip and choose a quality provider further from home. The researchers suggest older patients’ willingness to trade dollar cost for mileage is, perhaps, due to fewer commitments and more time to commute because of retirement status.

History played a role in how prospective orthopedic patients decided the worth of a star rating as well. Those with previous knowledge of star rating systems weren’t as enamored with the past, as results from the study indicated a history of prior surgery and engagement with health care and rating systems like online provider reviews reduced the relative value of an incremental star by $539.25 and $934.50, respectively.

On the other hand, patients who had not previously used ratings showed stronger reactions to changes in provider ratings. For a patient who hadn’t used ratings to make decisions about where to receive care, a physician star was worth $3,754.50. In comparison, patients who had used ratings valued the same star less, at $2,820.00.

The reasons for the differences are unclear, but Schwartz and his colleagues attribute the positive opinion about star ratings to rating naïveté and less experience with satisfaction tools.

“Such patients tend to be more optimistic about star rating values,” Schwartz says. “Those who are seasoned veterans of the health care system and know the questions to ask and understand that nothing can be distilled down to a star rating put less value on such systems.”

We overwhelmingly found that patients are willing to pay more for higher-quality care based on star ratings. Another interesting finding of the study is that patients considered the value of physician quality to be significantly greater than the value of hospital quality.

– Raghu Santanam, professor and chair of the Department of Information Systems

The idea of quality health care

Reputation aside, “the fee-for-service reimbursement model currently used in health care doesn’t reward those for being better,” Santanam adds.

“Even though providers can’t charge more for favorable medical outcomes, says Santanam, “the study confirms that star ratings play a significant role in how patients determine physician and hospital worth.”

Yet it’s just a start to the concept of quality and the metrics used to quantify provider value, according to Schwartz.

“Stakeholders and policymakers need to pursue further research into the trust that patients have in star rating systems,” says Schwartz. “It goes back to quality. There’s a push to tie payment to quality and encourage patients to be cared for by higher-quality providers. That’s great. But the question needs to be asked how patients interpret that and how does it affect patient choice.

“With this study, we asked how patients value these stars and the trade-offs they are willing to make. Several patient factors that may influence the perception of the stars need more examination.”