A Health Journalism 2014 panel about hospital rankings included (left to right) Evan Marks of Healthgrades, Marshall Allen of ProPublica and John Santa, M.D., of Consumer Reports.
(Photo: Pia Christensen)
Tony Leys
By Tony Leys
Hospital-ratings agencies portray themselves as champions of transparency when it comes to information about health-care quality. But some clam up if you ask for details of their business arrangements.
Consumers should know that hospitals pay substantial fees for permission to run ads about awards they receive from services such as Healthgrades, U.S. News & World Report and the Leapfrog Group. That fact could explain why the services offer awards in so many categories. (A hospital executive once grumbled to me that the result feels like a pee-wee soccer banquet – everybody gets a trophy.)
Any reporter writing about such awards and rankings ought to ask whether the hospitals are paying fees to the rating services. If the hospitals and ratings agencies won’t be up front about those fees, their reticence should be noted.
I asked about this issue at Health Journalism 2014 in Denver. During a session about hospital-quality ratings, Healthgrades Vice President Evan Marks acknowledged that his agency collects such fees, based partly on the size of the hospital. But he flatly said he would not disclose how much money is involved. The furthest he would go was to agree with my understanding that it was “a lot.”
In an interview afterward, Marks noted that many types of businesses keep their pricing policies confidential. “It’s not like we’re doing something nefarious,” he said. Marks stressed that the marketing fees have no influence on hospitals’ scores or awards, which are posted for free on Healthgrades’ website.
Marks also said hospitals don’t have to pay anything to simply put out a press release touting a Healthgrades award. But, he said, “when a hospital wants to use our iconography and our brand, and they want to put it on a bus, or put it on a billboard or on the back of a magazine, we ask that they pay a licensing fee to do that.”
Marks added that the licensing fees sometimes are part of packages that also include Healthgrades’ consulting work to help hospitals improve their performance or to help the hospitals create advertising campaigns.
Methodology
Each organization has an explanation of how they come up with their rankings:
Related
A private Des Moines hospital system told me in 2005 that it paid Healthgrades $10,000 to $15,000 a year for permission to mention the agency’s ratings in ads. That hospital system, UnityPoint, has since decided the results weren’t worth the money.
Like Healthgrades, Leapfrog and U.S. News do not demand payment from hospitals that simply send out press releases about a rating, but they charge for marketing uses.
A Leapfrog spokeswoman said her company believes in transparency, so it was willing to disclose that it charges $5,000 to $12,500 per year to hospitals that mention its ratings in ads.
A spokeswoman for U.S. News told me in an email that she could not disclose the fees her company charges hospitals for advertising rights. “We do not release pricing information for licensing programs, because it is proprietary information,” she wrote. (In turn, I won’t comment on the circularity of that statement, because it’s round.)
To pull back the curtain a bit, I asked University of Iowa Hospitals administrators how much they pay. It’s public money, so they quickly answered the question. Last year, the Iowa City health system paid U.S. News $39,375 for the right to advertise rankings of its main hospital and its children’s hospital. In the past five years, the system has paid U.S. News a total of $172,125.
Reporters writing about these rating services should be able to get similar figures from their public hospitals.
Not all ratings services collect marketing fees. Dr. John Santa, medical director of Consumer Reports’ effort, noted proudly during the AHCJ session that his company doesn’t allow hospitals to use its ratings in advertisements. His publication relies on reader subscription fees instead of ad revenues. (Marks, the Healthgrades executive, pointed out later that the policy means consumers must pay $30 to look at Consumer Reports’ ratings, instead of obtaining information for free from his company. However, at least the Consumer Reports fee is out in the open.)
Is something nefarious going on here? Hard to say. But the point of the health-care ratings movement is supposed to be transparency. The fact that some of the companies have opaque relationships with the hospitals they’re rating adds a cloud to the process.
Tony Leys is a reporter at the Des Moines Register. He was a 2011-12 AHCJ Regional Health Journalism Fellow.
