An Efficient Frontier Approach to Scoring and Ranking Hospital Performance

Abstract

For many years, stakeholders have been complaining about how hospital scores are computed in the Centers for Medicare and Medicaid Services (CMS) hospital star ratings. In “An Efficient Frontier Approach to Scoring and Ranking Hospital Performance,” author Dan Adelman shows how the current system can lower the scores even of hospitals that improve along every quality measure. He proposes a new approach, based on an optimization framework, that he proves does not exhibit this behaviour, and thus creates better incentives for hospitals to improve. The approach scores hospitals as closely as possible to the best scoring hospital on the efficient frontier of hospital performance, under the same measure weights. It is flexible enough to incorporate constraints that represent stakeholder interests, such as giving higher weight to measures that impact more people. Using this new approach, he computes new scores for nearly every hospital in the United States and shows that there are significant differences with the current CMS hospital star ratings.