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Why are health care report cards so bad (good)?

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  • Chen, Yijuan

Abstract

Abstract This paper provides a signaling-game theoretical foundation for empirically testing the effects of quality report cards in the U.S. health care industry. It shows that, when health care providers face an identical distribution of patient illness severities, the multidimensional measures in the existing report cards render them a mechanism that reveals the providers' qualities without causing them to select patients. However, non-identical patient type distributions between providers, attributed to the referring physician, may force the high-quality provider to shun patients in order to signal himself. Despite this imperfection, the existing report cards cause the minimum provider selection compared with alternative report mechanisms. Since the report cards not only may cause providers to select patients, but also cause patients to select providers, the single difference-in-differences estimates used in previous studies are not sufficient to indicate providers' selection behavior. In an updated empirical framework, a treatment effect shall be estimated once every period.

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Bibliographic Info

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

Volume (Year): 30 (2011)
Issue (Month): 3 (May)
Pages: 575-590

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Handle: RePEc:eee:jhecon:v:30:y:2011:i:3:p:575-590

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

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Keywords: Report cards Signaling game Difference-in-differences Experts;

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References

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  1. Mingshan Lu & Ching-to Albert Ma & Lasheng Yuan, 2000. "Risk Selection and Matching in Performance-Based Contracting," Papers 0101, Boston University - Industry Studies Programme.
  2. Ching-to Albert Ma, 1994. "Health Care Payment Systems: Cost and Quality Incentives," Papers 0047, Boston University - Industry Studies Programme.
  3. Gravelle, Hugh & Sivey, Peter, 2010. "Imperfect information in a quality-competitive hospital market," Journal of Health Economics, Elsevier, vol. 29(4), pages 524-535, July.
  4. Kyna Fong, 2007. "Evaluating Skilled Experts: Optimal Scoring Rules for Surgeons," Discussion Papers 07-043, Stanford Institute for Economic Policy Research.
  5. Epstein, Andrew J., 2010. "Effects of report cards on referral patterns to cardiac surgeons," Journal of Health Economics, Elsevier, vol. 29(5), pages 718-731, September.
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Cited by:
  1. Yijuan Chen & Juergen Meinecke, 2012. "Do Health Care Report Cards Cause Providers to Select Patients and Raise Quality of Care?," CEPR Discussion Papers 657, Centre for Economic Policy Research, Research School of Economics, Australian National University.
  2. Katz, Michael L., 2013. "Provider competition and healthcare quality: More bang for the buck?," International Journal of Industrial Organization, Elsevier, vol. 31(5), pages 612-625.
  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.

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