Changes in Consumer Demand Following Public Reporting of Summary Quality Ratings: An Evaluation in Nursing Homes

Objective. Limited consumer use of health care report cards may be due to the large amount of information presented in report cards, which can be difficult to understand. These limitations may be overcome with summary measures. Our objective was to evaluate consumer response to summary measures in the setting of nursing homes. Data Sources/Study Setting. 2005-2010 nursing home Minimum Data Set and Online Survey, Certification and Reporting (OSCAR) datasets. Study Design. In December 2008, Medicare converted its nursing home report card to summary or star ratings. We test whether there was a change in consumer demand for nursing homes related to the nursing home's star rating after the information was released. Principal Findings. The star rating system was associated with a significant change in consumer demand for low-and high-scoring facilities. After the star-based rating system was released, 1-star facilities typically lost 8 percent of their market share and 5-star facilities gained over 6 percent of their market share. Conclusions. The nursing home star rating system significantly affected consumer demand for high-and low-rated nursing homes. These results support the use of summary measures in report cards.