Do Bad Report Cards Have Consequences? How Publicly Reported Provider Quality Information Impacts the CABG Market in Pennsylvania
Justin Tsung-Yi Wang*, Jason Hockenberry, and Shin-Yi Chou*
*Department of Economics, College of Business and Economics, Lehigh University
Abstract
Since 1992, the Pennsylvania Health Care Cost Containment Council (PHC4) has published cardiac care report cards. The report cards publicly disclose patient health outcomes of coronary artery bypass graft (CABG) surgery at the hospital- and surgeon-level to improve the quality and efficiency of medical care. We first examine the impact of CABG report cards on a provider's aggregate volume and aggregate volume by patient severity. Then we employ a nested logit model to investigate the matching between patients and providers. Finally, we use predicted demand from the nested logit model to construct a report-card induced market concentration measure and to analyze the impact of market concentration on patients' health outcomes and resources used. The evidence in this paper suggests that the report card lowers poor performing and unrated surgeons' volume, but does not have an impact on hospital-level volume. We do not find the report card publication improves the matching between patients and providers. In addition, we find that report-card-induced market concentration does not have an impact on patients' in-hospital mortality, but reduces the amount of resources used for low severity patients. This finding suggests report cards improve the welfare of low severity patients, but the welfare implication for high severity patients is ambiguous.
Bio: Justin Wang is an economics PhD candidate in the College of Business and Economics. He received his Master of Business Administration with a concentration in Finance and his Bachelor's degree in Computer Science from the University of San Francisco. His current research interests include health economics and corporate governance. Justin is also a visiting instructor at Muhlenberg College.
