Value of new performance information in healthcare: evidence from Japan
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Value of new performance information in healthcare: evidence from Japan Susanna Gallani1 · Takehisa Kajiwara2 · Ranjani Krishnan3 Received: 27 November 2019 / Accepted: 7 August 2020 © Springer Science+Business Media, LLC, part of Springer Nature 2020
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 JEL Classification D83 · I18 · K32 · M16 · M41
* Susanna Gallani [email protected] Takehisa Kajiwara [email protected]‑u.ac.jp Ranjani Krishnan [email protected] 1
Harvard Business School, 369 Morgan Hall, 15 Harvard Way, Boston, MA 02163, USA
2
Graduate School of Business Administration, Kobe University, 2‑1 Rokkodai, Nada‑ku, Kobe 657‑8501, Japan
3
The Eli Broad College of Business, Michigan State University, N207 North Business College Complex, 632 Bogue St, East Lansing, MI 48824, USA
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Introduction Improving healthcare outcomes, quality, cost, access, and patient experience are topics of high policy interest in many countries. The effectiveness of any healthcare policy depends, in large part, on the extent to which it influences behaviors within the organizations subject to the policy. Systematic collection and disclosure of reliable, consistent, and comparable health outcomes measures is often proposed as a key policy tool. Whether the information provided by these performance measures is internalized by the organization and influences outcomes is an empirical question that we address in this study. Economic and decision theory alike posit that new information generated by mandated measur
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