NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Demanding Customers: Consumerist Patients and Quality of Care

Hai Fang, Nolan H. Miller, John A. Rizzo, Richard J. Zeckhauser

NBER Working Paper No. 14350
Issued in September 2008
NBER Program(s):   HC   HE

Consumerism arises when patients acquire and use medical information from sources apart from their physicians, such as the Internet and direct-to-patient advertising. Consumerism has been hailed as a means of improving quality. This need not be the result. Consumerist patients place additional demands on their doctors' time, thus imposing a negative externality on other patients. Our theoretical model has the physician treat both consumerist and ordinary patient under a binding time budget. Relative to a world in which consumerism does not exist, consumerism is never Pareto improving, and in some cases harms both consumerist and ordinary patients. Data from a large national survey of physicians shows that high levels of consumerism are associated with lower perceived quality. Three different measures of quality were employed. The analysis uses instrumental variables to control for the endogeneity of consumerism. A control function approach is employed, since our dependent variable is ordered and categorical, not continuous.

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Document Object Identifier (DOI): 10.3386/w14350

Published: Hai Fang & Nolan H. Miller & John Rizzo & Richard Zeckhauser, 2011. "Demanding Customers: Consumerist Patients and Quality of Care," The B.E. Journal of Economic Analysis & Policy, Berkeley Electronic Press, vol. 11(1), pages 59.

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