Healthgrades Inc. is a U.S. company that develops and markets quality and safety ratings of health care providers, including hospitals, nursing homes, physicians and dentists. Quality ratings are devised from publicly available patient safety data and analyzed with proprietary technology developed by Healthgrades. In addition to these ratings, Healthgrades offers consulting services to health care providers to improve safety and enhance marketing and public relations.

According to Healthgrades, hospital quality varies significantly from state to state. It rates Arizona, California, Illinois and Ohio as having the best hospitals, while Alabama, Arkansas, Georgia, Nevada, Oklahoma, Washington, D.C., and West Virginia have the worst rated hospitals.

Origins

The for-profit company, based in Denver, Colorado, was founded in 1998 by Kerry Hicks, (who served as president and CEO of the predecessor Specialty Care Network from 1995 to 1999), Peter Fatianow, Sarah Loughran, and Pat Jaeckle. Healthgrades grew steadily and in 2008, the company purchased Alijor, an internet company that gave health care providers the ability to display information about their business, including location(s), hours, insurance acceptance and credentials. Consumers could search the Ailjor site to find a health care provider that met their needs. Hicks grew Healthgrades into one of Colorado's largest public companies (formerly NASDAQ: HGRD) until Vestar Capital Partners acquired the company in 2010 and took the company private. In November 2011, Healthgrades merged with CPM Marketing, a Madison, Wisconsin–based company that provides customer relationship management solutions to hospitals. After the merger, CPM Marketing became CPM Healthgrades, a division of Healthgrades.

Ratings

Hospital ratings reports for specific procedures and diagnoses are compiled primarily from Medicare claim data, and include all hospitals that are Medicare participants. Some critics insist that medical records should be used instead of claim records which do not include factors that affect patient outcomes. Ratings are updated yearly, but data is two years old before Medicare releases it. Therefore, the 2011 ratings are derived using data from 2007 to 2009.

Healthgrades develops objective ratings based on data and information obtained from several sources, mostly available to the public. The data is analyzed using a proprietary methodology that identifies the recipients of the various awards and the "1-3-5 Star" designation. Specifically, most ratings are determined from multivariate logistic regressions of medical outcomes at a given healthcare provider and 1-, 3- and 5-star awards are given to providers whose negative outcomes are worse than expected, near predicted levels, and better than expected, respectively. The ratings have been criticized for oversights in the methodology that may actually penalize some institutions with ideal medical outcomes. Because Healthgrades' algorithms are proprietary, outside experts have "expressed concern about the reliability and validity of such 'black box' rating scales."

In addition to "Star" ratings, Healthgrades identifies facilities for their Top 10% in the Nation, Top 5% in the Nation, America's 50 Best Hospitals, Distinguished hospital award for Clinical Excellence, and Excellence Awards in 26 areas:

Products

Website

The Healthgrades website provides ratings and cost information for 5,000 hospitals and 16,000 nursing homes. Web visitors can input their opinions in a survey based on their experience with an individual health care professional, and view provider ratings at no charge. Some comprehensive reports require payment of a fee. Time listed the Healthgrades website as one of its 50 best websites of 2011. The site has 11 million unique visitors each month across all web properties. Many prominent companies and health plans make Healthgrades information available to their participants. Healthgrades also owns the website BetterMedicine.com

Licensing

Hospitals are Healthgrades biggest customers and provide the bulk of the company's income. Hospitals that are highly rated providers will license Healthgrades' ratings and trademarks to use in their marketing promotions. The company uses litigation to protect its name and ratings. Healthgrades sued the Robert Wood Johnson University Hospital in 2006 for copyright and trademark infringement after the hospital used Healthgrade's ratings and logo in promotional publications without paying licensing fees.

Consulting

Healthgrades provides consulting services to more than 350 hospitals for recommendations on how to preserve or improve their quality of care, as well as marketing and business development.

Independent evaluation

Medical experts have questioned the reliability of the 1-, 3- and 5-star ratings given to healthcare providers, criticizing the lack of transparency and perceived oversights in Healthgrades' methodology.

A 2004 report in the Rocky Mountain News concluded that Healthgrades had inaccurate physician disciplinary records (while competitor ChoicePoint had much greater accuracy). The report also detailed the complaints of former Healthgrades employees and physicians that pursued legal actions after inaccurate reports.

A 2002 study published in JAMA reported that Healthgrades ratings for mortality associated with acute myocardial infarction identified "groups of hospitals differing in the aggregate in quality of care and outcomes" but heterogeneity within the ratings for individual hospitals could not reliably discriminate between individual hospitals in quality of care or mortality. To illustrate: for any pair of hospitals rated to two different rating groups (1-, 3- or 5-star) by Healthgrades, the researchers determined that standardized mortality rates were "comparable or even better in the lower-rated hospital in more than 90% of the comparisons".

A 2011 study published in Archives of Surgery evaluated Healthgrades and US News & World Report ratings in oncologic surgeries, comparing top-rated hospitals in the two reports to all other U.S. hospitals. The authors determined that both ratings systems had substantive flaws in the evaluation of mortality following pancreatectomy, esophagectomy or colectomy; only the top rated hospitals for colectomy in the US News & World Report ratings had a statistically significant lower mortality than national averages—mortality rates at Healthgrades' best hospitals were not significantly lower for any of the three procedures.

A similar study, published in Journal of the American College of Surgeons in 2010, compared mortality in US News and World Report and HealthGgrades lists of "Best Hospitals" for abdominal aortic aneurysm repair, coronary artery bypass, aortic valve repair and mitral valve repair. Risk-adjusted mortality was found to be statistically significantly lower in the Healthgrades' "Best Hospitals" for coronary artery bypass and aortic valve repair.

Criticism

Healthgrades has been criticized for its use of "automatic renewal" subscription charges to customers that purchase reports. ConsumerAffairs.com lists multiple complaints from healthcare providers alleging inaccurate information and from consumers alleging credit card charges for unwanted subscription services.

The company discontinued all consumer based credit card product offerings during 2011.

Many health practitioners doubt the credibility and usefulness of online anonymous medical rating sites as there is little or no accountability on the part of the individual doing the rating. Many physicians feel that it is usually a disgruntled patient that is the most critical and vocal and therefore ratings may be skewed to the negative. In extreme cases, a patient may be disgruntled because a physician does not prescribe unnecessary narcotics and would use the Healthgrades website to rate the doctor poorly.

As of August 30, 2013, Healthgrades still lists among its physicians Oleg A. Davie, the infamous Brooklyn cosmetic surgeon arraigned with manslaughter charges for the death of Isel Pineda due to a recklessly performed liposuction in 2012. Despite that and the fact that Davie's license was suspended  Healthgrades currently shows Dr. Oleg A. Davie, Board Certified, with an 4.5 out of 5 stars based on 31 customer reviews  indicating that the data shown on the website is not completely current with medical data. There is a means to submit feedback response via "Contact Us" link at the bottom of the Healthgrades.com web page.