Do Good Reports Mean Higher Prices? The Impact of Hospital Compare Ratings on Cardiac Pricing

Avi Dor, William Encinosa, Kathleen Carey

NBER Working Paper No. 22858
Issued in November 2016
NBER Program(s):Health Care, Health Economics

Previous research found that the initiation of Hospital Compare (HC) quality reporting had little impact on patient outcomes. However little is known about its impact on hospital prices, which may be significant since insurers are positioned to respond to quality information when engaging hospitals in price negotiations. To explore this issue we estimate variants of difference-in-difference models allowing HC impacts to vary by levels of quality scores. We separately examine the effects of the three main scores (heart attack, heart failure, and combined mortalities) on transaction prices of two related cardiac procedures: bypass surgery and angioplasty. States which had mandated reporting systems preceding HC form the control group. Analyzing claims data of privately insured patients, we find that HC exerted downward pressure on prices, which we attribute to competitive pressures. However, hospitals ranked “above average” captured higher prices, thereby offsetting the overall policy effect. We conclude that HC was effective at constraining prices without penalizing high performers.

download in pdf format
   (567 K)

email paper

The NBER Bulletin on Aging and Health provides summaries of publications like this.  You can sign up to receive the NBER Bulletin on Aging and Health by email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w22858

Users who downloaded this paper also downloaded* these:
Colla, Bynum, Austin, and Skinner w22826 Hospital Competition, Quality, and Expenditures in the U.S. Medicare Population
Alexander and Currie w22542 Are Publicly Insured Children Less Likely to be Admitted to Hospital than the Privately Insured (and Does it Matter)?
Mitaritonna, Orefice, and Peri w22852 Immigrants and Firms' Outcomes: Evidence from France
Shen and Hsia w22861 Geographical Distribution of Emergency Department Closures and Consequences on Heart Attack Patients
Poterba Government Intervention in the Markets for Education and Health Care: How and Why?
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us