The Effect of Publicized Quality Information on Home Health Agency Choice

We examine consumers’ use of publicized quality information in Medicare home health care, a setting where consumer prices, travel costs, and service bundles do not vary across providers. This setting offers an opportunity to better isolate how consumers react to quality information independent from other related factors. We report two findings. First, agencies with high quality scores are more likely to be preferred by beneficiaries after the introduction of public reports than before. Second, community-based patients who are in greater need for improving functional status have larger responses to functional outcome measures than hospital-discharged patients whose focus may be on services preventing readmissions. However, these significant marginal effects are small. We conclude that the current public reporting approach is unlikely to have critical impacts on home health choice. Identifying and releasing quality information that is meaningful to consumers may help increase consumers’ use of publicly reported quality information.