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Introduction
Independent third-party raters, such as US News & World Report’s Best Hospitals, have become an important tool for health-care consumers and hospital managers. Often incorporating a numerical score, grade, star system, rankings or “best of”/“worst of” list, these rating systems are commonly used by consumers to evaluate hospital performance and quality. While the methodology of the ratings vary, most attempt to provide consumers with some means to make a comparative analysis and make better decisions regarding the choice of health-care providers (Ingram, 2010). Health-care consumers are taking a more active role in their health care and increasingly shopping around for health care like other consumer goods (Hanauer et al., 2014). Consumers tend to view the information from independent third parties as more reliable, objective and trustworthy than information disseminated by health-care providers. A 2007 study found that consumers trust independent hospital ratings more than the government, physicians, hospitals, pharmaceutical companies or friends and family members (Ingram, 2010). Rating systems are not only used by health-care consumers but by the media and internal stakeholders (administrators, boards and physicians) as well (Fellows, 2014).
Hospitals can benefit or suffer greatly from the media attention generated by the institution’s inclusion in such rating systems. Many hospitals use the ratings in its branding and marketing efforts (Fellows, 2014). Children’s Hospital Los Angeles credits its listing among the “Best hospitals” for increased website visits and donations – the hospital assembles a 30-member executive committee each year to complete the ranking surveys (Fellows, 2014). A hospital’s listing in the US News & World Report hospital rankings has been shown to have a positive effect on both patient volume and hospital revenues (Pope, 2009). An improvement in rank by one spot was found to result in an increase of up to 7 per cent in patient volume and revenue (Pope, 2009). In addition, third-party rating systems provide an additional level of transparency and accountability as the ratings can be used to benchmark against other institutions and for self-improvement (Whelan, 2009). The three most noted rating systems are US News & World Report’s Best Hospitals, The Leapfrog Group’s Hospital Safety Score and Healthgrades. Each system varies in the metrics used to rate hospitals, but all attempt to quantify the quality of service...