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Do Markets Respond to Quality Information? The Case of Fertility Clinics

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  • M. Kate Bundorf
  • Natalie Chun
  • Gopi Shah Goda
  • Daniel P. Kessler

Abstract

Although policymakers have increasingly turned to provider report cards as a tool to improve health care quality, existing studies provide mixed evidence that they influence consumer choices. We examine the effects of providing consumers with quality information in the context of fertility clinics providing Assisted Reproductive Therapies (ART). We report three main findings. First, clinics with higher birthrates had larger market shares after relative to before the adoption of report cards. Second, clinics with a disproportionate share of young, relatively easy-to-treat patients had lower market shares after adoption versus before. This suggests that consumers take into account information on patient mix when evaluating clinic outcomes. Third, report cards had larger effects on consumers and clinics from states with ART insurance coverage mandates. We conclude that quality report cards have potential to influence provider behavior in this setting.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 13888.

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Date of creation: Mar 2008
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Publication status: published as 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.
Handle: RePEc:nbr:nberwo:13888

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  1. Leemore Dafny & David Dranove, 2008. "Do report cards tell consumers anything they don't already know? The case of Medicare HMOs," RAND Journal of Economics, RAND Corporation, vol. 39(3), pages 790-821.
  2. David M. Cutler & Robert S. Ilckman & Mary Beth Landrum, 2004. "The Role of Information in Medical Markets: An Analysis of Publicly Reported Outcomes in Cardiac Surgery," American Economic Review, American Economic Association, vol. 94(2), pages 342-346, May.
  3. 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.
  4. Douglas Staiger & James H. Stock, 1994. "Instrumental Variables Regression with Weak Instruments," NBER Technical Working Papers 0151, National Bureau of Economic Research, Inc.
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  6. 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.
  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. M. Kate Bundorf & Melinda Henne & Laurence Baker, 2007. "Mandated Health Insurance Benefits and the Utilization and Outcomes of Infertility Treatments," NBER Working Papers 12820, National Bureau of Economic Research, Inc.
  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. Marianne Bitler & Lucie Schmidt, 2006. "Health disparities and infertility: impacts of state-level insurance mandates," Department of Economics Working Papers 2006-04, Department of Economics, Williams College, revised Nov 2006.
  11. Steven T. Berry, 1994. "Estimating Discrete-Choice Models of Product Differentiation," RAND Journal of Economics, The RAND Corporation, vol. 25(2), pages 242-262, Summer.
  12. Scanlon, Dennis P. & Chernew, Michael & McLaughlin, Catherine & Solon, Gary, 2002. "The impact of health plan report cards on managed care enrollment," Journal of Health Economics, Elsevier, vol. 21(1), pages 19-41, January.
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Cited by:
  1. Vincze, János, 2010. "Miért és mitől védjük a fogyasztókat?. Aszimmetrikus információ és/vagy korlátozott racionalitás
    [Asymmetric information and/or bounded rationality: why are consumers protected and from
    ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(9), pages 725-752.
  2. David Dranove & Ginger Zhe Jin, 2010. "Quality Disclosure and Certification: Theory and Practice," NBER Working Papers 15644, 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. Michael Richards, 2012. "Using the economics of certification to improve the safety and quality of male circumcision in developing countries," Applied Health Economics and Health Policy, Springer, Springer, vol. 10(2), pages 77-85, March.
  5. Michael Luca, 2011. "Reviews, Reputation, and Revenue: The Case of Yelp.com," Harvard Business School Working Papers 12-016, Harvard Business School.
  6. Bingxiao Wu, 2014. "Information Presentation and Consumer Choice: Evidence from Assisted Reproductive Technology (ART) Success Rates Reports," Departmental Working Papers, Rutgers University, Department of Economics 201410, Rutgers University, Department of Economics.
  7. Marianne Bitler & Lucie Schmidt, 2012. "Utilization of Infertility Treatments: The Effects of Insurance Mandates," Demography, Springer, Springer, vol. 49(1), pages 125-149, February.
  8. 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.
  9. 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.
  10. Yoshimi Adachi & Hiroyasu Iso & Junyi Shen & Kanami Ban & On Fukui & Hiroyuki Hashimoto & Takako Nakashima & Kenichiro Morishige & Tatuyoshi Saijo, 2013. "Impact of specialization in gynecology and obstetrics departments on pregnant women’s choice of maternity institutions," Health Economics Review, Springer, vol. 3(1), pages 1-11, December.
  11. Ansgar Wübker & Dirk Sauerland & Achim Wübker, 2010. "Beeinflussen bessere Qualitätsinformationen die Krankenhauswahl in Deutschland?," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 230(4), pages 467-490, August.
  12. Justin Wang & Jason Hockenberry & Shin-Yi Chou & Muzhe Yang, 2010. "Do Bad Report Cards Have Consequences? Impacts of Publicly Reported Provider Quality Information on the CABG Market in Pennsylvania," NBER Working Papers 16225, National Bureau of Economic Research, Inc.
  13. Werner, Rachel M. & Norton, Edward C. & Konetzka, R. Tamara & Polsky, Daniel, 2012. "Do consumers respond to publicly reported quality information? Evidence from nursing homes," Journal of Health Economics, Elsevier, vol. 31(1), pages 50-61.
  14. Powell, Philip T. & Laufer, Ron, 2010. "The promises and constraints of consumer-directed healthcare," Business Horizons, Elsevier, Elsevier, vol. 53(2), pages 171-182, March.

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