IDEAS home Printed from https://ideas.repec.org/a/bla/jemstr/v25y2016i4p789-825.html
   My bibliography  Save this article

The Effect of Performance Standards on Health Care Provider Behavior: Evidence from Kidney Transplantation

Author

Listed:
  • Sarah S. Stith
  • Richard A. Hirth

Abstract

Performance standards are designed to ensure a basic level of quality, and through public reporting of firm performance, encourage firms to compete on quality thus allowing the market to determine the optimal level of quality. In markets with substantial excess demand, however, demand effects may be insufficient to induce any change in firm behavior and enforcement may be required to ensure high quality. Even with enforcement, quality still may not improve at underperforming firms if gaming the system is less costly than improving quality. We test whether information alone or with regulatory enforcement improves outcomes or elicits gaming behavior in our study of 266 kidney transplant centers between 2001 and 2012. In a context of excess demand induced by price controls, we show that information alone has no impact and enforcement may actually increase market inefficiencies; firms respond to costly quality requirements, not by improving quality, but by reducing supply, which exacerbates the disequilibrium between supply and demand, and by cream‐skimming, which reduces access to transplantation among sicker patients.

Suggested Citation

  • Sarah S. Stith & Richard A. Hirth, 2016. "The Effect of Performance Standards on Health Care Provider Behavior: Evidence from Kidney Transplantation," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 25(4), pages 789-825, December.
    • Handle: RePEc:bla:jemstr:v:25:y:2016:i:4:p:789-825
    DOI: 10.1111/jems.12161
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/jems.12161
    Download Restriction: no
    File URL: https://libkey.io/10.1111/jems.12161?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. David M. Cutler & Robert S. Huckman & Mary Beth Landrum, 2004. "The Role of Information in Medical Markets: An Analysis of Publicly Reported Outcomes in Cardiac Surgery," American Economic Review, American Economic Association, vol. 94(2), pages 342-346, May.
    2. Bundorf, M. Kate & Chun, Natalie & Goda, Gopi Shah & Kessler, Daniel P., 2009. "Do markets respond to quality information? The case of fertility clinics," Journal of Health Economics, Elsevier, vol. 28(3), pages 718-727, May.
    3. Wang, Justin & Hockenberry, Jason & Chou, Shin-Yi & Yang, Muzhe, 2011. "Do bad report cards have consequences? Impacts of publicly reported provider quality information on the CABG market in Pennsylvania," Journal of Health Economics, Elsevier, vol. 30(2), pages 392-407, March.
    4. Jonathan T. Kolstad, 2013. "Information and Quality When Motivation Is Intrinsic: Evidence from Surgeon Report Cards," American Economic Review, American Economic Association, vol. 103(7), pages 2875-2910, December.
    5. Jonathan T. Kolstad, 2013. "Information and Quality when Motivation is Intrinsic: Evidence from Surgeon Report Cards," NBER Working Papers 18804, National Bureau of Economic Research, Inc.
    6. Dranove, David & Sfekas, Andrew, 2008. "Start spreading the news: A structural estimate of the effects of New York hospital report cards," Journal of Health Economics, Elsevier, vol. 27(5), pages 1201-1207, September.
    7. David Dranove & Daniel Kessler & Mark McClellan & Mark Satterthwaite, 2003. "Is More Information Better? The Effects of "Report Cards" on Health Care Providers," Journal of Political Economy, University of Chicago Press, vol. 111(3), pages 555-588, June.
    8. Gary P. Pisano & Richard M.J. Bohmer & Amy C. Edmondson, 2001. "Organizational Differences in Rates of Learning: Evidence from the Adoption of Minimally Invasive Cardiac Surgery," Management Science, INFORMS, vol. 47(6), pages 752-768, June.
    9. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(3), pages 488-500.
    10. Werner, Rachel M. & Norton, Edward C. & Konetzka, R. Tamara & Polsky, Daniel, 2012. "Do consumers respond to publicly reported quality information? Evidence from nursing homes," Journal of Health Economics, Elsevier, vol. 31(1), pages 50-61.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kastoryano, Stephen, 2024. "Biological, Behavioural and Spurious Selection on the Kidney Transplant Waitlist," IZA Discussion Papers 16995, Institute of Labor Economics (IZA).
    2. Mariétou H. Ouayogodé & Kurt E. Schnier, 2021. "Patient selection in the presence of regulatory oversight based on healthcare report cards of providers: the case of organ transplantation," Health Care Management Science, Springer, vol. 24(1), pages 160-184, March.
    3. Stith, Sarah S. & Li, Xiaoxue, 2021. "Does increasing access-to-care delay accessing of care? Evidence from kidney transplantation," Economics & Human Biology, Elsevier, vol. 41(C).
    4. Jinyang Chen & Chaoqun Wang, 2023. "“The reputation premium”: does hospital ranking improvement lead to a higher healthcare spending?," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 24(5), pages 817-830, July.
    5. Sarah S. Stith, 2018. "Organizational learning-by-doing in liver transplantation," International Journal of Health Economics and Management, Springer, vol. 18(1), pages 25-45, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Richards-Shubik, Seth & Roberts, Mark S. & Donohue, Julie M., 2022. "Measuring quality effects in equilibrium," Journal of Health Economics, Elsevier, vol. 83(C).
    2. Martin Gaynor & Kate Ho & Robert J. Town, 2015. "The Industrial Organization of Health-Care Markets," Journal of Economic Literature, American Economic Association, vol. 53(2), pages 235-284, June.
    3. Taylor J. Christensen, 2016. "A framework for guiding efforts to reward value instead of volume," International Journal of Health Economics and Management, Springer, vol. 16(2), pages 175-187, June.
    4. Frakes, Michael & Gruber, Jonathan & Jena, Anupam, 2021. "Is great information good enough? Evidence from physicians as patients," Journal of Health Economics, Elsevier, vol. 75(C).
    5. K. John McConnell & Richard C. Lindrooth & Douglas R. Wholey & Thomas M. Maddox & Nick Bloom, 2016. "Modern Management Practices and Hospital Admissions," Health Economics, John Wiley & Sons, Ltd., vol. 25(4), pages 470-485, April.
    6. Michael D. Frakes & Jonathan Gruber & Anupam Jena, 2019. "Is Great Information Good Enough? Evidence from Physicians as Patients," NBER Working Papers 26038, National Bureau of Economic Research, Inc.
    7. Gutacker, Nils & Siciliani, Luigi & Moscelli, Giuseppe & Gravelle, Hugh, 2016. "Choice of hospital: Which type of quality matters?," Journal of Health Economics, Elsevier, vol. 50(C), pages 230-246.
    8. Daniel Avdic & Tugba Bueyuekdurmus & Giuseppe Moscelli & Adam Pilny & Ieva Sriubaite, 2018. "Subjective and objective quality reporting and choice of hospital: Evidence from maternal care services in Germany," CINCH Working Paper Series 1803, Universitaet Duisburg-Essen, Competent in Competition and Health.
    9. Olivella, Pau & Siciliani, Luigi, 2017. "Reputational concerns with altruistic providers," Journal of Health Economics, Elsevier, vol. 55(C), pages 1-13.
    10. Van Parys, Jessica & Brown, Zach Y., 2024. "Broadband Internet access and health outcomes: Patient and provider responses in Medicare," International Journal of Industrial Organization, Elsevier, vol. 95(C).
    11. Tae Jung Yoon, 2020. "Quality Information Disclosure and Patient Reallocation in the Healthcare Industry: Evidence from Cardiac Surgery Report Cards," Marketing Science, INFORMS, vol. 39(3), pages 636-662, May.
    12. Bensnes, Simon & Huitfeldt, Ingrid, 2021. "Rumor has it: How do patients respond to patient-generated physician ratings?," Journal of Health Economics, Elsevier, vol. 76(C).
    13. Mariétou H. Ouayogodé & Kurt E. Schnier, 2021. "Patient selection in the presence of regulatory oversight based on healthcare report cards of providers: the case of organ transplantation," Health Care Management Science, Springer, vol. 24(1), pages 160-184, March.
    14. Nathaniel G. Hilger, 2016. "Why Don't People Trust Experts?," Journal of Law and Economics, University of Chicago Press, vol. 59(2), pages 293-311.
    15. Christopher J. Cronin & David K. Guilkey & Ilene S. Speizer, 2019. "Measurement error in discrete health facility choice models: An example from urban Senegal," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 34(7), pages 1102-1120, November.
    16. Kairies-Schwarz, Nadja & Krieger, Miriam, 2014. "How do Non-Monetary Performance Incentives for Physicians Affect the Quality of Medical Care? A Laboratory Experiment," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100583, Verein für Socialpolitik / German Economic Association.
    17. Jonathan T. Kolstad, 2013. "Information and Quality When Motivation Is Intrinsic: Evidence from Surgeon Report Cards," American Economic Review, American Economic Association, vol. 103(7), pages 2875-2910, December.
    18. Varkevisser, Marco & van der Geest, Stéphanie A. & Schut, Frederik T., 2012. "Do patients choose hospitals with high quality ratings? Empirical evidence from the market for angioplasty in the Netherlands," Journal of Health Economics, Elsevier, vol. 31(2), pages 371-378.
    19. Sofia Amaral-Garcia & Mattia Nardotto & Carol Propper & Tommaso Valletti, 2022. "Mums Go Online: Is the Internet Changing the Demand for Health Care?," The Review of Economics and Statistics, MIT Press, vol. 104(6), pages 1157-1173, November.
    20. Zhao, Xin, 2016. "Competition, information, and quality: Evidence from nursing homes," Journal of Health Economics, Elsevier, vol. 49(C), pages 136-152.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jemstr:v:25:y:2016:i:4:p:789-825. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.kellogg.northwestern.edu/research/journals/JEMS/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.