City Attorney David Chiu

U.S. News & World Report faces legal scrutiny over dubious hospital rankings

San Francisco City Attorney investigates questionable methodology and undisclosed financial links with highly ranked hospitals

SAN FRANCISCO (June 20, 2023) — San Francisco City Attorney David Chiu sent a letter to U.S. News & World Report today seeking information on the company’s hospital rankings, which have come under scrutiny from medical experts for imprecise methodology and bias. The letter also demands that U.S. News publicly disclose the payments it receives from the hospitals it endorses, as required by federal regulations.

City Attorney David Chiu
City Attorney David Chiu

“Consumers use these rankings to make consequential health care decisions, and yet there is little understanding that the rankings are fraught and that U.S. News has financial relationships with the hospitals it ranks,” said City Attorney Chiu. “The hospital rankings appear to be biased towards providing treatment for wealthy, white patients, to the detriment of poorer, sicker, or more diverse populations. Perverse incentives in the rankings risk warping our health care system. Hospitals are treating to the test by investing in specialties that rack up the most points rather than in primary care or other worthy specialties.”

U.S. News markets itself as an expert on ranking hospitals. It encourages patients to follow its hospital rankings even over physician referrals, claiming “the hospital the doctor suggested for you might be right for you – but maybe not.”

U.S. News rankings affect many people’s healthcare decisions. Although U.S. News does not state how many people visit its online hospital rankings specifically, it claims that more than 40 million people visit its website every month, with others buying its annual “Best Hospitals Guidebook.”

However, the data and methodology behind the hospital rankings are unreliable or imprecise at best. U.S. News uses data not intended or appropriate for assessment purposes to formulate the rankings. In some areas, the rankings are based on small subset of patients and exclude data from treatment of lower-income patients, like Medicaid patients. Peer opinion surveys play an outsized role in rankings. In some specialties, the rankings are based entirely on peer opinion surveys.

The rankings create perverse incentives for hospitals that harm the health care system. They incentivize hospitals to invest in areas that score more points in the rankings instead of investing in primary care, other specialties, or ways to reduce the costs of care. In some instances, U.S. News weights treatment for conditions experienced primarily by white people over treatment for conditions experienced primarily by people of color. For example, in the children’s hospital rankings, U.S. News gives disproportionate weight to cystic fibrosis treatment, experienced by 1 in 3,500 White Americans, over sickle cell disease, experienced by 1 in 365 Black newborns.

Additionally, U.S. News receives revenue from hospitals it ranks that it does not disclose. By failing to do so, U.S. News appears to be violating Federal Trade Commission regulations requiring the disclosure of a material connection between an endorser and the subject of an endorsement. U.S. News receives revenues from hospitals through licensing fees to use its “best hospitals” badge, subscriptions to access the granular data underpinning the rankings, and advertising on U.S. News’s website and in the Best Hospitals Guidebook. This funding is significant, with one hospital in Kansas acknowledging that it paid US News $42,000 to use the “best hospitals” badge for one year.

Smaller, rural, or community hospitals do not have the resources to compete in the rankings. This creates a cycle in which patients and crucial research funding flow to higher ranked hospitals instead of smaller, community hospitals. Those smaller hospitals continue to be under resourced and do not perform well in the rankings or are not ranked at all.

St. Luke’s University Health Network, based in Pennsylvania and New Jersey, recently announced that the network would no longer participate in U.S. News rankings, citing similar concerns to those raised in the City Attorney’s letter. St. Luke’s joins dozens of colleges, law schools, and medical schools that have withdrawn from U.S. News rankings of their respective institutions due to public scrutiny of ranking methodologies.

In his letter, the City Attorney demands U.S. News substantiate its advertising claims, explain its methodology and how it intends to correct biases, and immediately publicly disclose the revenue it receives from hospitals. The City Attorney’s letter to U.S. News & World Report can be found here.