Quality of Care Information Makes a Difference

OBJECTIVES: Quality report cards are becoming increasingly more common and receive much publicity. They can have significant impact on competition among providers, costs, and quality of health care. The authors test the hypotheses that hospitals and surgeons with better outcomes reported in the NYS Cardiac Surgery Reports experience a relative increase in their market share and prices. METHODS: Information from the New York State Cardiac Surgery Reports was linked with physicians' claims submitted to Medicare and was used to calculate market shares and average prices for hospitals and physicians performing CABG surgeries. Regression models were estimated to test hypotheses. All 30 hospitals offering coronary artery bypass graft (CABG) were studied as well as a majority of surgeons (114 or approximately 80%) performing CABG surgery in New York State during the 1990-1993 period. RESULTS: Findings indicate that hospitals and physicians with better outcomes experienced higher rates of growth in market shares. Physicians with better outcomes also had higher rates of growth in charges for this procedure. CONCLUSIONS: Patients (and referring physicians) seem to respond to information about quality of individual surgeons and hospitals as expected. The magnitude of the association between reported mortality and market shares varies geographically, potentially reflecting differences in sociodemographic characteristics. The association tends to decline over time, suggesting that it is primarily due to "new" information.