NCPA - National Center for Policy Analysis

Do "Report Cards" On Quality Improve Health Care?

February 27, 2002

According to a new study, mandatory public report cards disclosing patient health outcomes by physician and/or hospital may provide important information on health care. But they may also give doctors and hospitals incentives to decline to treat more difficult, severely ill patients. Whether report cards are good for patients depends on whether the benefits outweigh their costs in terms of the quantity, quality and appropriateness of medical treatment.

In their study, the authors used national data on Medicare patients at risk for cardiac surgery. Among the findings:

  • Cardiac surgery report cards in New York and Pennsylvania led both to behavior by providers to select healthier patients and to improved matching of patients with hospitals.
  • On average, this led to higher levels of expenditure and to worse health outcomes, particularly for sicker patients.
  • In the short run, these report cards decreased patient and social welfare.

Providing potential patients with information was expected to enhance their understanding of a provider's track record, and hence, improve quality. However, it may also discourage physicians from tackling cases deemed more difficult. Additionally, in an attempt to keep quality high, reports cards give providers incentives to over-utilize resources, and thus may increase costs.

Source: David Dranove, Daniel Kessler, Mark McClellan and Mark Satterthwaite, "Is More Information Better? The Effects of 'Report Cards' on Health Care Providers," National Bureau of Economic Research, NBER Working Paper No.w8697, January 2002.

For NBER text

http://www.nber.org/papers/w8697

 

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