Essays on the Effects of Information Disclosure in Hospital Markets Open Access

Abstract

Hospital quality is complex and multidimensional, making it difficult to quantify and communicate. These challenges drive information problems that may affect the hospitals that patients choose, hospital prices, and hospital investment decisions. This creates the possibility for novel measures of hospital quality to affect hospital markets and the efficiency of health care delivery. Online reviews are one such measure; they provide an aggregate, accessible measure of hospital quality, which may affect these markets. Using hospital reviews from the online rating platform, Yelp, and numerous hospital data sources, the papers in this dissertation employ causal inference techniques to provide new evidence about the effects of online reviews on hospital markets and how hospitals might work to improve patient experience of care. 

The first analysis shows that patients are willing to travel further to receive care from a hospital with a higher star rating. Reflective of this underlying mechanism, the second study shows hospitals can charge higher prices following a higher aggregate star rating. These findings highlight the incentives that hospitals face to prioritize patient experience and motivate the final chapter, which shows that hospital star ratings increase in response to windfall profits. Using the review text, additional analysis shows that this is driven, at least in part, by the presence of amenities, which is suggestive of hospital investment behavior. These studies further our understanding of information disclosure in hospital markets, informing policy and providing a foundation for further research.

Table of Contents

1 Online Reviews and Hospital Choice 1

1.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

1.2 Information Disclosure in Hospital Care . . . . . . . . . . . . . . . . . . . . . 4

1.3 Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

1.3.1 Online Reviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

1.3.2 Inpatient Claims Data . . . . . . . . . . . . . . . . . . . . . . . . . . 10

1.3.3 Hospital Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

1.4 Empirical Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

1.5 Choice in Labor and Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . 22

1.6 Choices in Orthopedic Surgery . . . . . . . . . . . . . . . . . . . . . . . . . . 28

1.7 Falsification Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

1.8 Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

1.9 Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

1.9.1 Yelp Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

1.9.2 Data Cleaning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

1.9.3 Florida Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

1.9.4 Community Detection for Hospital Markets . . . . . . . . . . . . . . 43

1.9.5 Labor and Delivery Sensitivity Analyses . . . . . . . . . . . . . . . . 44

1.9.6 Orthopedic Surgery Sensitivity Analyses . . . . . . . . . . . . . . . . 48

2 Online Reviews and Hospital Prices 55

2.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

2.2 Theoretical Motivation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

2.3 Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

2.3.1 Yelp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

2.3.2 Healthcare Cost Report Information System (HCRIS) . . . . . . . . . 68

2.3.3 Additional Data Sources . . . . . . . . . . . . . . . . . . . . . . . . . 70

2.4 Empirical Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

2.4.1 Instrument Construction . . . . . . . . . . . . . . . . . . . . . . . . . 75

2.4.2 Manipulation of the Rating . . . . . . . . . . . . . . . . . . . . . . . 76

2.4.3 Covariate Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

2.5 Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

2.5.1 First Stage and Reduced Form Results . . . . . . . . . . . . . . . . . 82

2.5.2 Main Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

2.5.3 Specification Tests and Sensitivity Analyses . . . . . . . . . . . . . . 88

2.6 Potential Mechanisms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93

2.6.1 Partitioned Regression Analysis . . . . . . . . . . . . . . . . . . . . . 93

2.6.2 Discrete Choice Analysis . . . . . . . . . . . . . . . . . . . . . . . . . 94

2.7 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101

2.8 Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102

2.8.1 Yelp Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102

2.8.2 Variable Construction . . . . . . . . . . . . . . . . . . . . . . . . . . 106

2.8.3 Sorting at Various Review Counts . . . . . . . . . . . . . . . . . . . . 108

2.8.4 Sensitivity Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108

2.8.5 Falsification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116

2.8.6 Community Detection Methods . . . . . . . . . . . . . . . . . . . . . 117

3 Medicaid Expansion and Patient Experience 121

3.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122

3.2 Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126

3.2.1 Medicaid Expansion . . . . . . . . . . . . . . . . . . . . . . . . . . . 127

3.2.2 Hospital Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127

3.2.3 Yelp Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129

3.3 Empirical Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130

3.3.1 First Order Outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . 131

3.3.2 Patient Experience . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132

3.4 Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133

3.4.1 First Order Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133

3.4.2 Patient Experience Results . . . . . . . . . . . . . . . . . . . . . . . . 137

3.5 Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140

3.6 Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142

3.6.1 Yelp Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142

3.6.2 Non-Clinical Quality Words . . . . . . . . . . . . . . . . . . . . . . . 144

3.6.3 HCRIS Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146

3.6.4 Alternative Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147

 

About this Dissertation

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School	Laney Graduate School
Department	Economics
Degree	Ph.D.
Submission	Dissertation
Language	English
Research Field	Economics, General
Keyword	information disclosure online reviews hospital choice hospital prices quality
Committee Chair / Thesis Advisor	Ian McCarthy, Emory University
Committee Members	Stephen O'Connell, Emory University Sara Markowitz, Emory University

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