Measuring quality in the US healthcare system.

by | Nov 10, 2022

Dr. Bala Hota, Tendo SVP and Chief Informatics Officer, is trained as an infectious disease physician. He has also studied epidemiology and holds a Master’s Degree in public health. For the last 20 years, he has worked with advanced technology and data to help create better quality measurements that will ultimately result in improved patient outcomes. The quality systems that are in place in US hospitals today are built off an antiquated model—one that relies on information that is not well-correlated with true quality of care and does not empower patients to understand the best pathways for the right care. Over the coming months, Dr. Hota will be authoring a series of blogs on both the current state and the potential future of quality and value in US healthcare.


I’ve spent the last 20 years in the clinical informatics space working on how we can successfully use advanced technology and electronic record data to create better patient outcomes and experiences. As a practicing physician, I was able to treat each individual patient in front of me, which was incredibly rewarding. But what’s always truly interested me is being able to use systems approaches to help many people through better process and policy. And I believe that with the right system design—and the right incentives built into that system—we can better serve populations and improve the health of communities.

Quality transparency.

When I was with Rush University Medical Center, I served as the Chief Analytics Officer and Associate Chief Medical Officer. At Rush, we dug deeply into figuring out how quality is measured, what patients want to see regarding quality, and how we could be sure we were providing the best quality care. The conclusion our team came to is that the field has evolved greatly over the last twenty years, and there are some things associated with quality that are being executed really well today.

But if you’re a patient, you don’t have any real visibility into whether you’re seeing the right provider for your specific health issue. Generally, we know that there are some truly amazing providers, the majority of providers are doing a good job, and there are providers and systems that should be avoided. But what’s the best way to get that information in front of patients, and what are the measures of quality that patients really want? That’s an area we thought deeply about, studied, and considered.

Existing hospital ratings systems.

Currently, there are a few major existing systems that rate hospital quality. One is the CMS Hospital Star Rating system that measures quality based on data that hospitals make available for Medicare patients. Another is the US News Best Hospitals system which many hospitals pay close attention to. Leapfrog also has a system that focuses on hospital safety. There are other systems as well, but these are three of the major players.

What all of these systems have in common is that they use billing data or data that hospitals report for revenue in billing to measure the type and quality of care that’s provided. Ratings systems use electronic algorithms that work with the billing data to figure out whether hospitals are providing good or bad care for certain measures.

Here’s how the ratings are produced by these systems: It all begins with hospitals providing care. As physicians see patients, they write notes in the medical chart, and signals of the care provided are captured in the electronic data in the EMR (e.g., medications prescribed, labs ordered, and vital signs captured). Because much of the US healthcare system is fee-for-service, and electronic records are primarily billing systems first and foremost, this charting of notes by physicians is a primary activity of doctors in order to generate revenue for hospitals. Medical coders review the documentation that physicians generate and then develop a bill. The purpose of the bill is to get paid by Medicare, so the bill contains codes for what services were provided and what diagnosis the patient was given. That data goes to Medicare, and Medicare creates a dataset (one that is lagged by approximately two years). Medicare then makes that dataset available for purchase. CMS, US News, and Leapfrog use the procured data to create their hospital rankings.

As part of the overall process, computer programs are written to take the diagnosis codes and the service codes and determine details, such as:

  • What disease(s) the patient has.
  • How sick the patient is.
  • Whether the patient lived.
  • Whether the patient was readmitted.
  • What the overall utilization of services was post-procedure.
  • Whether there were any surgical complications.

An aggregate score is then created for the hospital for each procedure (e.g., total hip replacements, total knee replacements), which is the basis for creating the overall rankings. On the one hand, by using billing data, ratings systems align with auditable records that reflect billable services provided by the hospital. However, this can create a number of inaccuracies in the way quality is captured, and variability which makes comparisons between hospitals incorrect.

Looking forward.

In my next post, we’ll examine what works within those systems, what could be improved, and how we should consider amending the ratings process for the ultimate benefit of patients.