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Abstract: A necessary condition for competition to promote quality in hospital markets is that patients are sensitive to differences in hospital quality. In this paper we examine the relationship between hospital quality, as measured by publicly available quality ratings, and patient hospital choice for angioplasty using individual claims data from a large health insurer. We find that Dutch patients have a high propensity to choose hospitals with a good reputation, both overall and for cardiology, and a low readmission rate after treatment for heart failure. Relative to a mean readmission rate of 8.5% we find that a 1%-point lower readmission rate is associated with a 12% increase in hospital demand. Since readmission rates are not adjusted for case-mix they may not provide a correct signal of hospital quality. Insofar patients base their hospital choice on such imperfect quality information, this may result in suboptimal choices and risk selection by hospitals. [Copyright &y& Elsevier]

Background: Transparency in quality of care is an increasingly important issue in healthcare. In many international healthcare systems, transparency in quality is crucial for health insurers when purchasing care on behalf of their consumers, for providers to improve the quality of care (if necessary), and for consumers to choose their provider in case treatment is needed. Conscious consumer choices incentivize healthcare providers to deliver better quality of care. This paper studies the impact of quality on patient volume and hospital choice, and more specifically whether high quality providers are able to attract more patients., Methods: The dataset covers the period 2006-2011 and includes all patients who underwent a cataract treatment in the Netherlands. We first estimate the impact of quality on volume using a simple ordinary least squares (OLS), second we use a mixed logit to determine how patients make trade-offs between quality, distance and waiting time in provider choice., Results: At the aggregate-level we find that, a one-point quality increase, on a scale of one to a hundred, raises patient volume for the average hospital by 2-4 percent. This effect is mainly driven by the hospital with the highest quality score: the effect halves after excluding this hospital from the dataset. Also at the individual-level, all else being equal, patients have a stronger preference for the hospital with the highest quality score, and appear indifferent between the remaining hospitals., Conclusion: Our results suggest that the top performing hospital is able to attract significantly more patients than the remaining hospitals. We find some evidence that a small share of consumers may respond to quality differences, thereby contributing to incentives for providers to invest in quality and for insurers to take quality into account in the purchasing strategy., (© 2018 The Author(s); Published by Kerman University of Medical Sciences. This is an open-access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.)