Duke 2008 | ASHE | Equity and Efficiency in Health and Healthcare

Policy makers, both in the U.S. and internationally, are promoting provider 'report cards' as a tool to improve health care quality. While these types of report cards may represent a solution to problems of asymmetric information in health care markets, existing research on whether report cards have affected consumer choices is mixed.

We examine the effects of public report cards for fertility clinics. This setting has two important characteristics. First, public reporting of quality information in this market was mandatory, rather than voluntary, on the part of providers, eliminating concerns over the endogeneity of either the provider reporting decision or the setting in which third parties choose to provide this type of information. In addition, a system of nearly universal voluntary reporting existed prior to the release of report cards, allowing us to address a potentially important source of bias associated with this type of intervention - the possibility that report cards provide information that consumers would have known in their absence - in a unique way.

The primary source of data is information reported by clinics to the Society for Assisted Reproductive Technologies (SART). Our basic empirical strategy is to determine whether the relationship between clinic market share and clinic quality based on the reported measures changed after the implementation of public reporting. The report cards, which were published annually beginning in 1997, are based on data from cycles started during the year two years prior to the publication date. Thus, in the empirical models, we test whether the effect of 3-year lagged information on utilization differed before and after the implementation of quality reporting. We also estimate models with additional measures of clinic performance, including one-year lagged performance, the age distribution of patients, and the multiple birth rate, to test particular hypotheses regarding the types of information consumers use. Finally, we examine whether public reporting had a differential effect in states that adopted mandates requiring insurers to comprehensively cover infertility treatment relative to those that did not.

We find the dissemination of quality information influenced clinic market share and volume. The three-year lagged birth rate, the key reported measure, had a larger positive effect on both clinic market share and clinic volume after the introduction of mandatory quality reporting. We also find that clinics were penalized by consumers in the form of lower market share for treating relatively young patients in the reporting era, but not prior to the dissemination of reports cards. Finally, we find that the effect of the reports on market share was greater in states that adopted comprehensive insurance mandates than in states that did not. We interpret this as evidence that quality reporting had the largest effect on the types of patients who would have been least informed through informal channels in the absence of a report card.

We discuss the implications of our findings for the research literature on the effects of report cards on consumer decision-making and for policies requiring public dissemination of quality information in health care markets.