Do star ratings really reflect hospital performance?

The publication of performance ratings for NHS Trusts (star ratings) is an important part of NHS policy. There are significant benefits to a Trust in being awarded the top rating of three stars. The methodology for awarding stars to acute hospitals is explained. The most significant areas of performance in determining a hospital's star rating are identified. The Department of Health claimed that performance in 2002 was better than in 2001, against standards that are getting tougher. This claim is assessed but no clear evidence is found to substantiate it. An alternative performance rating system using the same data is developed and compared with the official version to illustrate the importance of methodology--this system used only the outcome measures of hospital services included within the star ratings system, and not process measures. Only 41 per cent of hospitals would have received the same number of stars as their official rating. Some implications of the system of performance ratings are discussed.