Nursing home 5-star rating system exacerbates disparities in quality, by payer source

Health Aff (Millwood). 2015 May;34(5):819-27. doi: 10.1377/hlthaff.2014.1084.


Market-based reforms in health care, such as public reporting of quality, may inadvertently exacerbate disparities. We examined how the Centers for Medicare and Medicare Services' five-star rating system for nursing homes has affected residents who are dually enrolled in Medicare and Medicaid ("dual eligibles"), a particularly vulnerable and disadvantaged population. Specifically, we assessed the extent to which dual eligibles and non-dual eligibles avoided the lowest-rated nursing homes and chose the highest-rated homes once the five-star rating system began, in late 2008. We found that both populations resided in better-quality homes over time but that by 2010 the increased likelihood of choosing the highest-rated homes was substantially smaller for dual eligibles than for non-dual eligibles. Thus, the gap in quality, as measured by a nursing home's star rating, grew over time. Furthermore, we found that the benefit of the five-star system to dual eligibles was largely due to providers' improving their ratings, not to consumers' choosing different providers. We present evidence suggesting that supply constraints play a role in limiting dual eligibles' responses to quality ratings, since high-quality providers tend to be located close to relatively affluent areas. Increases in Medicaid payment rates for nursing home services may be the only long-term solution.

Keywords: Access To Care; Long-Term Care; Medicaid; Medicare; Quality Of Care.

Publication types

  • Research Support, U.S. Gov't, P.H.S.

MeSH terms

  • Aged
  • Aged, 80 and over
  • Consumer Behavior / economics
  • Consumer Behavior / statistics & numerical data
  • Female
  • Frail Elderly*
  • Health Services Accessibility / economics
  • Health Services Accessibility / statistics & numerical data
  • Healthcare Disparities / economics*
  • Healthcare Disparities / statistics & numerical data*
  • Humans
  • Insurance, Health, Reimbursement / economics*
  • Insurance, Health, Reimbursement / statistics & numerical data*
  • Male
  • Medicaid / economics
  • Medicaid / statistics & numerical data
  • Medicare / economics
  • Medicare / statistics & numerical data
  • Nursing Homes / economics*
  • Nursing Homes / standards*
  • Quality of Health Care / economics*
  • Quality of Health Care / standards*
  • United States