Are Two Report Cards Better than One? The Case of CABG Surgery and Patient Sorting

Public reporting of information regarding quality may encourage sellers to improve product quality. In this paper, I study how quality disclosure affect health care providers’ behavior. In particular, I examine the impact of mortality report cards on the degree of within-hospital sorting using hospital discharge data on coronary artery bypass graft (CABG) surgery in New York State from 1986 to 1993. Hospital report cards may encourage surgeons to allocate patients in more efficient ways to boost hospital scores. However, surgeon report cards may provide incentives for surgeons to avoid risky patients. I find that the level of within-hospital sorting increased immediately following the publication of hospital report cards but fell after the publication of surgeon report cards for hospitals in Manhattan, but not hospitals elsewhere. This phenomenon may have been driven by the intense competition faced by hospitals and surgeons in Manhattan. ∗Paul Merage School of Business, University of California, Irvine. [email protected]. I am indebted to David Dranove for his continuous guidance and support. I am also grateful to Bernard Black, Leemore Dafny, and Craig Garthwaite for their advice. I would like to thank Jennifer Brown, Cory Capps, Kitt Carpenter, Steven Farmer, Jie Gong, Mark Satterthwaite, Todd Sarver, Tuan-Hwee Sng, and Bruce Spencer for valuable discussions. Conversations with Robert Bonow, Angelo Costas, and Steven Farmer vastly improved my understanding of medical and institutional background information. Chieko Maene provided generous GIS support. This work has also benefited from the comments of seminar participants at Kellogg School of Management, Institute for Policy Research at Northwestern University, Department of Economics at National University of Singapore, Bates White, Paul Merage School of Business at University of California, Irvine, Acumen LLC., and Cornerstone Research. All errors are mine.