NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Do Hospital Report Cards Matter?

"Information made public by the bypass surgery reporting program has had an impact on both the volume of cases and the future quality at hospitals identified as poor performers."

In schools, report cards are given to students to stimulate better academic performance. This same idea has been applied to hospitals that provide cardiac surgery to patients, and some research indicates that, as with report cards in schools, the goal is being met: the quality of care is improved.

In The Role of Information in Medical Markets: An Analysis of Publicly Reported Outcomes in Cardiac Surgery (NBER Working Paper No. 10489), authors David Cutler, Robert Huckman, and Mary Beth Landrum access data from the nation's longest-standing effort to measure and report health care quality -- the Cardiac Surgery Reporting System (CSRS) in New York state -- to assess the success of the system. The CSRS collects data on clinical outcomes, that is, whether or not the patient died in the hospital following surgery, and data on the health history of the patient before the operation, using information on roughly 40 conditions, including diabetes, kidney failure, liver failure, or prior heart attack. Using CSRS data for 1991 through 1999, the authors find that the information made public by the bypass surgery reporting program has had an impact on both the volume of cases and the future quality at hospitals identified as poor performers.

Indeed, those weaker hospitals have lost some relatively healthy patients to competing facilities with better records. This shift, the authors note, may mean that healthier patients have the time and energy to search for higher quality providers of bypass surgery. Several other studies, though, suggest that cardiologists and managed care insurers have not used such report cards in referring patients to specific hospitals or in making contracts for care.

In any case, the hospitals identified publicly as offering relatively low quality surgery experienced a decline of 10 percent in the number of patients during the first 12 months after an initial report, and this decrease remained in place for three years. That amounts to about 4.9 fewer surgery patients per month. The average hospital performs about 50 bypass surgery operations per month. For patients subsequently choosing these hospitals, the good news is that their risk-adjusted mortality rate declined significantly: about 1.2 percentage points.

One possible explanation for these changes, the authors note, is that surgeons at poorly performing hospitals may simply be choosing to do fewer procedures, or may be encouraged by hospital administrators to operate less often. In the extreme, some surgeons may not do bypass operations anymore. However, the data indicate that these low-performing hospitals are still doing the same volume of operations on higher risk patients where immediate surgery may be needed. Possibly, given the high marginal profitability associated with cardiac procedures, the hospitals are working harder to get more patients to replace those patients choosing hospitals with a better record, the authors suggest. Alternatively, the hospitals and surgeons may be making efforts to improve their future quality out of concern for patient health and their reputations as providers of high quality medical care.

In contrast to the situation at lower quality hospitals, those hospitals with low mortality rates see a positive flow of patients in the first year following a report. But the volume declines after that. The authors cannot determine what has happened to the patients choosing not to have an operation in hospitals with poorer report cards. Some may simply have decided not to have an operation.

-- David R. Francis


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