Do markets respond to quality information? The case of fertility clinics

Abstract

Although policymakers have increasingly turned to provider report cards as a tool to improve health care quality, existing studies provide mixed evidence on whether 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 birth rates had larger market shares after the adoption of report cards relative to before. 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 consumers respond to quality report cards when choosing among providers of ART.

Top-Down and Bottom-Up Approaches to Health Care Quality: The Impacts of Regulation and Report Cards

“…card studies (16,105) find significant demand response, whereas two (21, 30) do not. The only two new health plan studies during the review period, Chernew et al (22) and Dafny & Dranove (28), find a demand response, albeit a small one.…”

Does Hospital Reputation Influence the Choice of Hospital?

“…E.g. Bundorf et al (2009), Wübker et al (2010 and Mukamel and Mushlin (1998) examine the effect of quality information and report cards on markets shares and case figures by using aggregated data. More recent studies use individual-level data to estimate the hospital choice by patients, while the hospital choice is represented via discrete choice models.…”

Hospital Quality and Demand: An Analysis of German Hospitals Using Distance-Metric Approach

“…Similarly, in their analysis of hip replacement surgeries in the United Kingdom, Beckert et al (2012) reveal that hospital demand increases with clinical quality. In brief, the relevant literature verifies the positive relationship between clinical quality and hospital demand (see Bundorf et al, 2009;Pope, 2009;Moscone et al, 2012;Gaynor et al, 2012;Varkevisser et al, 2012;Ruwaard and Douven, 2014;McConnell et al, 2016).…”