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Value of new performance information in healthcare: evidence from Japan

Susanna Gallani (), Takehisa Kajiwara () and Ranjani Krishnan ()
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Susanna Gallani: Harvard Business School
Takehisa Kajiwara: Kobe University
Ranjani Krishnan: Michigan State University

International Journal of Health Economics and Management, 2020, vol. 20, issue 4, No 1, 319-357

Abstract: Abstract Mandatory measurement and disclosure of outcome measures are commonly used policy tools in healthcare. The effectiveness of such disclosures relies on the extent to which the new information produced by the mandatory system is internalized by the healthcare organization and influences its operations and decision-making processes. We use panel data from the Japanese National Hospital Organization to analyze performance improvements following regulation mandating standardized measurement and peer disclosure of patient satisfaction performance. Drawing on value of information theory, we document the absolute value and the benchmarking value of new information for future performance. Controlling for ceiling effects in the opportunities for improvement, we find that the new patient satisfaction measurement system introduced positive, significant, and persistent mean shifts in performance (absolute value of information) with larger improvements for poorly performing hospitals (benchmarking value of information). Our setting allows us to explore these effects in the absence of confounding factors such as incentive compensation or demand pressures. The largest positive effects occur in the initial period, and improvements diminish over time, especially for hospitals with poorer baseline performance. Our study provides empirical evidence that disclosure of patient satisfaction performance information has value to hospital decision makers.

Keywords: Value of information; Feedback; Patient satisfaction; Healthcare (search for similar items in EconPapers)
JEL-codes: D83 I18 K32 M16 M41 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1007/s10754-020-09283-1

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International Journal of Health Economics and Management is currently edited by Leemore Dafny, Robert Town, Mark Pauly, David Dranove and Pedro Pita Barros

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