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Type Subsidiary
Industry Health care
Founded 1998 (1998)
Headquarters Denver, United States
Key people Roger C. Holstein (CEO)
Parent Vestar Capital Partners

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.[1] 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.[2]


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.[3] Consumers could search the Ailjor site to find a health care provider that met their needs.[4] Hicks grew Healthgrades into one of Colorado's largest public companies[5] (formerly NASDAQHGRD)[6] until Vestar Capital Partners acquired the company in 2010[7] and took the company private.[8] 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.[9]


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.[1][10][11]

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.[12] 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.[13] The ratings have been criticized for oversights in the methodology that may actually penalize some institutions with ideal medical outcomes.[13] Because Healthgrades' algorithms are proprietary, outside experts have "expressed concern about the reliability and validity of such 'black box' rating scales."[14]

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:



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.[15] 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.[5] Healthgrades also owns the website[6]


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.[12]


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.[5][8]

Independent evaluation[edit]

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.[13][14]

A 2004 report in the Rocky Mountain News concluded that Healthgrades had inaccurate physician disciplinary records (while competitor ChoicePoint had much greater accuracy).[16] The report also detailed the complaints of former Healthgrades employees and physicians that pursued legal actions after inaccurate reports.[16]

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.[17] 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".[17]

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.[18] 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.[18]

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.[19] Risk-adjusted mortality was found to be statistically significantly lower in the Healthgrades' "Best Hospitals" for coronary artery bypass and aortic valve repair.[19]


Healthgrades has been criticized for its use of "automatic renewal" subscription charges to customers that purchase reports.[20] lists multiple complaints from healthcare providers alleging inaccurate information and from consumers alleging credit card charges for unwanted subscription services.[21]

The company discontinued all consumer based credit card product offerings during 2011.[citation needed]

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.[citation needed]

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.[22] Despite that and the fact that Davie's license was suspended [23] Healthgrades currently shows Dr. Oleg A. Davie, Board Certified, with an 4.5 out of 5 stars based on 31 customer reviews [24] 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 web page.


  1. ^ a b " - Consumer complaints for doctors" Right Diagnosis website
  2. ^ Janice Lloyd (October 23, 2012). "Which states have safest hospitals". USA Today. p. 5B. Retrieved December 11, 2012. 
  3. ^ Sibley, Lisa (July 25, 2008). "Alijor's online directory of providers growing". San Jose Business Journal. Retrieved December 11, 2012. 
  4. ^ "Alijor" Level Wing Marketing, Case studies
  5. ^ a b c "Profile of Kerry Hicks" Walkers Research
  6. ^ a b Shapiro, Scott: "Healthgrades Evaluates Hospital Emergency Medicine for the First Time" Healthgrades press release, June 23, 2010
  7. ^ "Health Grades agrees to $294 private equity buyout". Business Week. Associated Press. July 28, 2010. Retrieved December 11, 2012. 
  8. ^ a b "Healthgrades" Hoovers Business Intelligence, Company profiles
  9. ^ David Migoya (November 3, 2011). "HealthGrades merges with monitoring firm CPM". The Denver Post. Retrieved December 11, 2012. 
  10. ^ Graham, Judith (October 15, 2008). "Healthgrades posts 2009 hospital rankings". Chicago Tribune. Retrieved December 11, 2012. 
  11. ^ "Healthgrades" Palmetto Health, facility evaluations
  12. ^ a b "Healthgrades vs. Robert Wood Johnson University Hospital" US District Court files, June 19, 2009
  13. ^ a b c Sullivan T (November 2006). "Editor's Commentary: A failing grade". Ann Vasc Surg 20 (6): 707–8. doi:10.1007/s10016-006-9131-y. PMID 17103078. 
  14. ^ a b Nash, I. "Web alert: Healthgrades". Current Cardiology Reports 5 (2): 92–93. doi:10.1007/s11886-003-0073-5. "The algorithms used to create the scores are proprietary; therefore, it is not possible to “score the scorecard.” Many quality experts have expressed concern about the reliability and validity of such “black box” rating scales." 
  15. ^ McCracken, Harry (August 16, 2011). "50 Websites That Make the Web Great". Time. Retrieved December 11, 2012. 
  16. ^ a b Rachel Brand (October 16, 2004). "Analysis gives Health Grades flunking marks". Rocky Mountain News. Retrieved December 11, 2012. 
  17. ^ a b Krumholz HM, Rathore SS, Chen J, Wang Y, Radford MJ (March 2002). "Evaluation of a consumer-oriented internet health care report card: the risk of quality ratings based on mortality data". JAMA 287 (10): 1277–87. doi:10.1001/jama.287.10.1277. PMID 11886319. 

    Editorial comment: Naylor CD (March 2002). JAMA 287 (10): 1323–1325. doi:10.1001/jama.287.10.1323. 

    Letters: JAMA 287 (24): 3206–3208. June 2002. doi:10.1001/jama.287.24.3206. 

  18. ^ a b Osborne NH, Ghaferi AA, Nicholas LH, Dimick JB (May 2011). "Evaluating popular media and internet-based hospital quality ratings for cancer surgery". Arch Surg 146 (5): 600–4. doi:10.1001/archsurg.2011.119. PMID 21576612. 

    Invited critique: Linehan DC, Jaques D (May 2011). "Choosing "The Best": Comment on "Evaluating Popular Media and Internet-Based Hospital Quality Ratings for Cancer Surgery"". Arch Surg 146 (5): 604–605. doi:10.1001/archsurg.2011.97. 

  19. ^ a b Osborne NH, Nicholas LH, Ghaferi AA, Upchurch GR, Dimick JB (January 2010). "Do popular media and internet-based hospital quality ratings identify hospitals with better cardiovascular surgery outcomes?". J. Am. Coll. Surg. 210 (1): 87–92. doi:10.1016/j.jamcollsurg.2009.09.038. PMID 20123337. 
  20. ^ " illustrates risk of losing money with 'auto-renew' subscriptions", Beau Brendler, AOL DailyFinance News, July 14, 2010
  21. ^ Consumer Complaints & Reviews: Healthgrades
  22. ^ Bernstein, Nina (March 28, 2013). "Manslaughter Charges for Doctor Who Gave Liposuction to Transplant Recipient". New York Times. Retrieved June 4, 2013. 
  23. ^ "Professional Misconduct and Physician's discipline". New York State Department of Health. 12 July 2012. Retrieved 4 June 2013. 
  24. ^ "Dr. Oleg A. Davie, MD". Retrieved 4 June 2013. 

External links[edit]