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College ratings, college rankings, and Medicare

The most important article published today on college ratings wasn't about colleges at all. It was this investigation from the New York Times' Katie Thomas of Medicare's five-star rating system for nursing homes. The Medicare rating system is the most direct parallel to what the Education Department is trying to do with colleges: a federal quality assurance program that's meant to ensure, eventually, that tax dollars are being well-spent. The NYT's findings have some troubling implications:

The Medicare ratings, which have become the gold standard across the industry, are based in large part on self-reported data by the nursing homes that the government does not verify. Only one of the three criteria used to determine the star ratings - the results of annual health inspections - relies on assessments from independent reviewers. The other measures — staff levels and quality statistics — are reported by the nursing homes and accepted by Medicare, with limited exceptions, at face value.

The Education Department has argued over and over that people shouldn't judge a college rating system that doesn't exist yet. But much of the data in its current database, the Integrated Postsecondary Education Data System, or IPEDS, is self-reported and the penalties for inaccurate numbers are fairly vague ("administrative action" from the Office of Federal Student Aid), according to the department's handbook for the college employees who fill out its surveys.

Thomas' article also suggests that if the rating system gains any traction, some colleges are likely to embrace it as a marketing tool — with the attendant consequences:

The nursing home industry, which lobbied against the ratings, later largely embraced them. An industry trade group, the American Health Care Association, offers members a free service that helps companies track their star rating; it says the rising scores are evidence that quality is improving.

When colleges talk about unintended consequences for ratings systems, they usually refer to unduly harsh penalties for institutions that don't really deserve them. But another possible unintended consequence is what will happen when some institutions inevitably learn to game the system.