Abstract
We develop a theoretical model to study a policy that publicly reports hospital waiting times. We characterize two effects of such a policy: the ‘competition effect’ that drives hospitals to compete for patients by increasing service rates and reducing waiting times and the ‘signaling effect’ that allows patients to distinguish a high-quality hospital from a low-quality one. While for a low-quality hospital both effects help reduce waiting time, for a high-quality hospital, they act in opposite directions. We show that the competition effect will outweigh the signaling effect for the high-quality hospital, and consequently, both hospitals' waiting times will be reduced by the introduction of the policy. This result holds in a policy environment where maximum waiting time targets are not binding.
| Original language | English |
|---|---|
| Pages (from-to) | 1355-1371 |
| Number of pages | 17 |
| Journal | Health Economics (United Kingdom) |
| Volume | 25 |
| Issue number | 11 |
| Early online date | 10 Aug 2015 |
| DOIs | |
| Publication status | E-pub ahead of print - 10 Aug 2015 |
Keywords
- quality signaling
- report cards
- waiting times