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Does better information about hospital quality affect patients’ choice? Empirical findings from Germany

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  • Wübker, Ansgar
  • Sauerland, Dirk
  • Wübker, Achim

Abstract

Background: Economic theory strongly suggests that better information about the quality of care affects patients’ choice of health service providers. However, we have little empirical evidence about the impact of information provided on provider’s choice in Germany. Problem: In Germany, we recently find publicly available information about hospital quality. For example, 50 percent of the hospitals in the Rhine-Ruhr area do now publish their quality data voluntarily in a comprehensive, understandable and well prepared publication. Empirically, we see a strong demand for this publication. However, we do not have information so far, if – and how – this information affect patients’ choice of hospitals. Data and methodology: We take cross sectional time series data from more than 700.000 patients in the Rhine-Ruhr area and in the Cologne-Bonn area (control group) for the time period 2003 to 2006, i.e. 16 quarters. We examine whether the publication of quality information affects market shares and number of cases of the hospitals as well as travelling distance that patients accept to get to the hospital of their choice. In order to account for hospital-specific heterogeneity, we use fixed and random effects models. Results: First: Hospitals, which publish their quality data voluntarily, do attract more patients – compared to such hospital, that do not publish their quality data. Second: In the group of the publishing hospitals, hospitals with a higher than average quality slightly increased their market shares, whereas hospitals with a lower than average quality lost market shares. Conclusion: The provision of quality data has a significant impact on hospital choice: a higher quality leads to a higher demand. Based on these finding decision makers in hospitals have strong incentives (i) to make quality information publicly available and (ii) to keep their quality of care high.

Suggested Citation

  • Wübker, Ansgar & Sauerland, Dirk & Wübker, Achim, 2008. "Does better information about hospital quality affect patients’ choice? Empirical findings from Germany," MPRA Paper 10479, University Library of Munich, Germany, revised 09 Sep 2008.
  • Handle: RePEc:pra:mprapa:10479
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    File URL: https://mpra.ub.uni-muenchen.de/10479/1/MPRA_paper_10479.pdf
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    References listed on IDEAS

    as
    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. Ma, Ching-to Albert, 1994. "Health Care Payment Systems: Cost and Quality Incentives," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 3(1), pages 93-112, Spring.
    3. David Dranove & Daniel Kessler & Mark McClellan & Mark Satterthwaite, 2003. "Is More Information Better? The Effects of "Report Cards" on Health Care Providers," Journal of Political Economy, University of Chicago Press, vol. 111(3), pages 555-588, June.
    4. 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," American Economic Review, American Economic Association, vol. 94(2), pages 342-346, May.
    5. 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.
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    Cited by:

    1. Emmert, Martin & Hessemer, Stefanie & Meszmer, Nina & Sander, Uwe, 2014. "Do German hospital report cards have the potential to improve the quality of care?," Health Policy, Elsevier, vol. 118(3), pages 386-395.
    2. Sergey Shishkin & Alexandra Burdyak & Elena Potapchik, 2013. "Patient choice in the post-Semashko health care system," HSE Working papers WP BRP 09/PA/2013, National Research University Higher School of Economics.
    3. Nadine Rozenkranz & Andreas Eckhardt & Mirko Kühne & Christoph Rosenkranz, 2013. "Health Information on the Internet," Business & Information Systems Engineering: The International Journal of WIRTSCHAFTSINFORMATIK, Springer;Gesellschaft für Informatik e.V. (GI), vol. 5(4), pages 259-274, August.

    More about this item

    Keywords

    Keywords: Quality of care; Information; Hospital Choice JEL Classifications: I 12; C 33;

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior

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