The Effects of Quality Standards on Healthcare Provider Behavior: Evidence from Organ Transplantation

Healthcare providers are increasingly subject to performance requirements to ensure high quality care and control costs. In transplantation, such requirements have existed since 1991 with significant variation in standards and in enforcement across different types of organ transplants and over time. This extensive and varied historical usage offers a unique opportunity to study the effects of these types of requirements on healthcare provider behavior and on patient outcomes. Transplant centers are required by law to meet or exceed expected survival rates, which are calculated on the basis of risk-adjusted national averages. If actual survival rates fall sufficiently below expected survival rates, centers face investigation by regulatory authorities with the risk of an expensive audit process and possible shutdown. Early results using difference-in-differences methods indicate that transplant centers respond both preemptively and following actual breach of survival requirements. Failure to meet expected survival rates is associated with a 26% increase in the rate of patients removed from the waitlist with the cited reason “too sick for transplant.” More generally, transplant centers respond to the possible and actual breach of these survival requirements by increasing the minimum health requirements of both waitlisted individuals and transplant recipients. Final results are expected to show that these survival requirements result in an increase in the total life years generated through transplantation but that these survival improvements come at the price of reduced access to transplantation and a decrease in research activity. The latter may ultimately negate the improvement in total life years from the usage of these requirements.