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A Theory of Waiting Time Reporting and Quality Signaling

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  • Yijuan Chen
  • Juergen Meinecke
  • Peter Sivey

Abstract

We develop a theoretical model to study a policy that publicly reports hospital waiting times. We characterize two effects of such a policy: the ‘competition effect’ that drives hospitals to compete for patients by increasing service rates and reducing waiting times and the ‘signaling effect’ that allows patients to distinguish a high‐quality hospital from a low‐quality one. While for a low‐quality hospital both effects help reduce waiting time, for a high‐quality hospital, they act in opposite directions. We show that the competition effect will outweigh the signaling effect for the high‐quality hospital, and consequently, both hospitals' waiting times will be reduced by the introduction of the policy. This result holds in a policy environment where maximum waiting time targets are not binding. Copyright © 2015 John Wiley & Sons, Ltd.

Suggested Citation

  • Yijuan Chen & Juergen Meinecke & Peter Sivey, 2016. "A Theory of Waiting Time Reporting and Quality Signaling," Health Economics, John Wiley & Sons, Ltd., vol. 25(11), pages 1355-1371, November.
    • Handle: RePEc:wly:hlthec:v:25:y:2016:i:11:p:1355-1371
    DOI: 10.1002/hec.3222
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    1. Sá, Luís & Siciliani, Luigi & Straume, Odd Rune, 2019. "Dynamic hospital competition under rationing by waiting times," Journal of Health Economics, Elsevier, vol. 66(C), pages 260-282.
    2. Chen, Yijuan & Sivey, Peter, 2021. "Hospital report cards: Quality competition and patient selection," Journal of Health Economics, Elsevier, vol. 78(C).
    3. Rechel, Bernd & McKee, Martin & Haas, Marion & Marchildon, Gregory P. & Bousquet, Frederic & Blümel, Miriam & Geissler, Alexander & van Ginneken, Ewout & Ashton, Toni & Saunes, Ingrid Sperre & Anell, , 2016. "Public reporting on quality, waiting times and patient experience in 11 high-income countries," Health Policy, Elsevier, vol. 120(4), pages 377-383.
    4. Domenico Lisi & Giacomo Pignataro, 2021. "A note on the trade‐off between waiting times and quality in a constrained hospital market," Health Economics, John Wiley & Sons, Ltd., vol. 30(1), pages 180-185, January.
    5. Luyi Yang & Laurens G. Debo & Varun Gupta, 2019. "Search Among Queues Under Quality Differentiation," Management Science, INFORMS, vol. 65(8), pages 3605-3623, August.

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