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The impact of quality on hospital choice. Which information affects patients’ behavior for colorectal resection or knee replacement?

Author

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  • David Kuklinski

    (Technische Universität Berlin)

  • Justus Vogel

    (Technische Universität Berlin)

  • Alexander Geissler

    (University of St. Gallen)

Abstract

Quality competition among hospitals, induced by patients freely choosing their hospital in a price regulated market, can only be realized if quality differences between hospitals are transparent, understandable, and thus influence patients’ hospital choice. We use data from ~145,000 German patients and ~ 900 hospitals for colorectal resections and knee replacements to investigate whether patients value quality and specialization when choosing their hospital. Using a random utility choice model, we estimate patients’ marginal utilities, willingness to travel and change in hospital demand for quality improvements. Patients respond to service quality and specialization and thus, quality competition seems to be present. Colorectal resection patients are willing to travel longer for more specialized hospitals (+9% for procedure volume, +9% for certification). Knee replacement patients travel longer for hospitals with better service quality (+6%) and higher procedure volume (+12%). However, clinical quality indicators, often difficult to access and interpret, barely play a role in patients’ hospital choice. Furthermore, we find that competition on quality for colorectal resection is rather local, whereas for knee replacement we observe regional competition patterns.

Suggested Citation

  • David Kuklinski & Justus Vogel & Alexander Geissler, 2021. "The impact of quality on hospital choice. Which information affects patients’ behavior for colorectal resection or knee replacement?," Health Care Management Science, Springer, vol. 24(1), pages 185-202, March.
    • Handle: RePEc:kap:hcarem:v:24:y:2021:i:1:d:10.1007_s10729-020-09540-2
    DOI: 10.1007/s10729-020-09540-2
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    References listed on IDEAS

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    2. Justus F. A. Vogel & Max Barkhausen & Christoph M. Pross & Alexander Geissler, 2022. "Defining minimum volume thresholds to increase quality of care: a new patient-oriented approach using mixed integer programming," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 23(7), pages 1085-1104, September.
    3. Christoph Strumann & Alexander Geissler & Reinhard Busse & Christoph Pross, 2022. "Can competition improve hospital quality of care? A difference-in-differences approach to evaluate the effect of increasing quality transparency on hospital quality," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 23(7), pages 1229-1242, September.

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