Do Patients Respond to Negative Hospital Quality Information? Evidence from Organ Transplant Regulation

Significant heterogeneity in surgical outcomes across hospitals in the United States are well-documented, and are largely attributed to differences in hospital quality rather than different patient populations, implying that quality of care could be improved by directing patients to high-quality hospitals.  Payers are increasingly using hospital report cards to provide patients with quality information, though there is little evidence that patients respond to this information.  The lukewarm response may be driven by the hassle of obtaining quality information or travel costs associated with using a higher quality hospital. 

A recent policy change required some organ transplant centers flagged by the Centers for Medicare and Medicaid Services for poor performance to send patients on their organ waiting lists letters detailing the center’s current underperformance and offering to cover all costs associated with receiving the transplant at another center.  We use patient waitlist data from the Scientific Registry of Transplant Recipients from 2008 – 2014 to estimate difference-in-difference regressions of patient decisions to list at an additional center for patients in 26 heart, kidney, and liver transplant programs before and after centers are required to notify patients compared to 120 programs that only have poor performance reported via online report cards. 

Patients receiving notification are 6 percentage points (29%) more likely to list at an additional center.  Although this is a large effect, the majority of patients do not respond to extremely negative quality information about a risky surgical procedure.  We find heterogeneity in responses, with multi-listing behavior concentrated among men (12.6 pp) and Whites (13pp).  Findings raise significant concerns about the efficacy of report cards as a tool to motivate consumer healthcare choices.