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

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

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Hospitals, which publish their quality data voluntarily, do attract more patients – compared to such hospital, that do not publish their quality data.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.

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File URL: http://mpra.ub.uni-muenchen.de/10479/1/MPRA_paper_10479.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 10479.

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Date of creation: 08 May 2008
Date of revision: 09 Sep 2008
Handle: RePEc:pra:mprapa:10479
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Web page: http://mpra.ub.uni-muenchen.de

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  1. 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.
  2. Ching-to Albert Ma, 1994. "Health Care Payment Systems: Cost and Quality Incentives," Papers 0047, Boston University - Industry Studies Programme.
  3. Leemore Dafny & David Dranove, 2005. "Do Report Cards Tell Consumers Anything They Don't Already Know? The Case of Medicare HMOs," NBER Working Papers 11420, National Bureau of Economic Research, Inc.
  4. 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.
  5. 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.
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