Do health care consumers look at their provider's report cards? An investigation of the impact of cardiac report cards in Pennsylvania

More than 10,000 coronary artery bypass graft (CABG) surgeries are performed in Pennsylvania each year. The medical care providers of such open heart surgery usually have more information about the providers' quality, patients' health status, and alternative treatments than the medical care consumers have. Therefore, the problem of information asymmetry exists in this medical market. In order to reduce the information asymmetry problem and improve efficiency, Pennsylvania Health Care Cost Containment Council started publishing the outcomes of CABG surgeries in the early 1990's. The publication is called “Pennsylvania's Guide to Coronary Artery Bypass Graft Surgery”, and is also known as CABG report cards. By publicly disclosing the health outcomes of patients who undergo CABG procedures, future consumers would benefit from this new information. For example, future consumers would be able to select high quality providers with a sound track record in order to achieve better health outcomes. Under the report cards system, CABG providers also have the incentive to improve their quality of care to attract patients. Doctors would be more careful when performing CABG procedures since their reputation is on the line. These factors could lead to better patient health outcomes. However, there are many ways that CABG providers can game the system. For instance, doctors could become more selective in choosing what kind of patients to treat. They may avoid treating sicker patients since they are more likely to die. This behavior is known as patient dumping. Since the publication of CABG report cards, the in-hospital motility rate of CABG surgery has been gradually declining from 4.9% in 1991 to 1.9% in 2005. The impact of CABG report cards has not been fully examined. Therefore, the objective of this study is to investigate the impact of CABG report cards in Pennsylvania. The results of our study suggest the following. First, we find that Pennsylvania CABG report cards accurately identify bad doctors. Second, we find that hospital-level ratings do not have an impact on hospital-level volume. Third, the publication of CABG report cards lowers the quarterly volume of patients for surgeons that received a higher-than-expected in-hospital mortality flag. These results suggest there is a reallocation of the market shares of CABG surgeries within hospitals. The results are robust after controlling for year fixed effects, hospital fixed effects, and surgeon fixed effects.