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Do bad report cards have consequences? Impacts of publicly reported provider quality information on the CABG market in Pennsylvania

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  • Wang, Justin
  • Hockenberry, Jason
  • Chou, Shin-Yi
  • Yang, Muzhe

Abstract

Since 1992, the Pennsylvania Health Care Cost Containment Council (PHC4) has published cardiac care report cards for coronary artery bypass graft (CABG) surgery providers. We examine the impact of CABG report cards on a provider's aggregate volume and volume by patient severity and then employ a mixed logit model to investigate the matching between patients and providers. We find a reduction in volume of poor performing and unrated surgeons' volume but no effect on more highly rated surgeons or hospitals of any rating. We also find that the probability that patients, regardless of severity of illness, receive CABG surgery from low-performing surgeons is significantly lower.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Health Economics.

Volume (Year): 30 (2011)
Issue (Month): 2 (March)
Pages: 392-407

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Handle: RePEc:eee:jhecon:v:30:y:2011:i:2:p:392-407

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Web page: http://www.elsevier.com/locate/inca/505560

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Keywords: Report cards Mixed logit Provider quality;

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References

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  1. Wedig, Gerard J. & Tai-Seale, Ming, 2002. "The effect of report cards on consumer choice in the health insurance market," Journal of Health Economics, Elsevier, vol. 21(6), pages 1031-1048, November.
  2. Cutler, David & Landrum, Mary Beth & Huckman, Robert, 2004. "The Role of Information in Medical Markets: An Analysis of Publicly Reported Outcomes in Cardiac Surgery," Scholarly Articles 2640582, Harvard University Department of Economics.
  3. David M. Cutler & Robert S. Huckman & Mary Beth Landrum, 2004. "The Role of Information in Medical Markets: An Analysis of Publicly Reported Outcomes in Cardiac Surgery," NBER Working Papers 10489, National Bureau of Economic Research, Inc.
  4. Vivian Ho, 2006. "Does certificate of need affect cardiac outcomes and costs?," International Journal of Health Care Finance and Economics, Springer, vol. 6(4), pages 300-324, December.
  5. Cutler, David & Huckman, Robert, 2003. "Technological Development and Medical Productivity: The Diffusion of Angioplasty in New York State," Scholarly Articles 2664291, Harvard University Department of Economics.
  6. Bundorf, M. Kate & Chun, Natalie & Goda, Gopi Shah & Kessler, Daniel P., 2009. "Do markets respond to quality information? The case of fertility clinics," Journal of Health Economics, Elsevier, vol. 28(3), pages 718-727, May.
  7. Beaulieu, Nancy Dean, 2002. "Quality information and consumer health plan choices," Journal of Health Economics, Elsevier, vol. 21(1), pages 43-63, January.
  8. Bhat, Chandra R., 2001. "Quasi-random maximum simulated likelihood estimation of the mixed multinomial logit model," Transportation Research Part B: Methodological, Elsevier, vol. 35(7), pages 677-693, August.
  9. Jin, Ginger Zhe & Sorensen, Alan T., 2006. "Information and consumer choice: The value of publicized health plan ratings," Journal of Health Economics, Elsevier, vol. 25(2), pages 248-275, March.
  10. Kenneth Train, 2003. "Discrete Choice Methods with Simulation," Online economics textbooks, SUNY-Oswego, Department of Economics, number emetr2, Spring.
  11. Sloan, Frank A., 2000. "Not-for-profit ownership and hospital behavior," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 21, pages 1141-1174 Elsevier.
  12. Newhouse, Joseph P, 1970. "Toward a Theory of Nonprofit Institutions: An Economic Model of a Hospital," American Economic Review, American Economic Association, vol. 60(1), pages 64-74, March.
  13. McGuire, Thomas G., 2000. "Physician agency," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 9, pages 461-536 Elsevier.
  14. Arne Risa Hole, 2007. "Fitting mixed logit models by using maximum simulated likelihood," Stata Journal, StataCorp LP, vol. 7(3), pages 388-401, September.
  15. Chernew, Michael & Gowrisankaran, Gautam & Scanlon, Dennis P., 2008. "Learning and the value of information: Evidence from health plan report cards," Journal of Econometrics, Elsevier, vol. 144(1), pages 156-174, May.
  16. Ellis, Randall P., 1998. "Creaming, skimping and dumping: provider competition on the intensive and extensive margins1," Journal of Health Economics, Elsevier, vol. 17(5), pages 537-555, October.
  17. Dranove, David & Sfekas, Andrew, 2008. "Start spreading the news: A structural estimate of the effects of New York hospital report cards," Journal of Health Economics, Elsevier, vol. 27(5), pages 1201-1207, September.
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Cited by:
  1. Filistrucchi, L. & Ozbugday, F.C., 2012. "Mandatory Quality Disclosure and Quality Supply: Evidence from German Hospitals," Discussion Paper 2012-070, Tilburg University, Center for Economic Research.
  2. Jason Hockenberry & Lorens Helmchen, 2014. "The Nature of Surgeon Human Capital Depreciation," NBER Working Papers 20017, National Bureau of Economic Research, Inc.
  3. Chou, Shin-Yi & Deily, Mary E. & Li, Suhui & Lu, Yi, 2014. "Competition and the impact of online hospital report cards," Journal of Health Economics, Elsevier, vol. 34(C), pages 42-58.
  4. Varkevisser, Marco & van der Geest, Stéphanie A. & Schut, Frederik T., 2012. "Do patients choose hospitals with high quality ratings? Empirical evidence from the market for angioplasty in the Netherlands," Journal of Health Economics, Elsevier, vol. 31(2), pages 371-378.
  5. Hendrik Schmitz & Magdalena Stroka, 2014. "Do Elderly Choose Nursing Homes by Quality, Price or Location?," Ruhr Economic Papers 0495, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  6. Suzanne Ruwaard & Rudy Douven, 2014. "Quality and hospital choice for cataract treatments: the winner takes most," CPB Discussion Paper 272, CPB Netherlands Bureau for Economic Policy Analysis.

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