Quality Information Disclosure and Patient Reallocation in the Healthcare Industry: Evidence from Cardiac Surgery Report Cards

In a healthcare industry with capacity constraints, the best healthcare providers are often congested after quality information disclosure. This congestion can lead to the reallocation of urgent patients to low-quality healthcare providers. The reallocation can have a detrimental impact on the overall patient survival rate if sicker patients benefit more from the best providers. This paper provides the first empirical evidence regarding this problem in the context of the publication of cardiac surgery report cards. I find that these report cards can have a negative impact on positive assortative matching between patients and surgeons because of a reallocation of high-risk patients to low-quality surgeons. Despite the quality improvement in response to these report cards, such patient reallocation can still be a problem, conditional on the improved quality, and, thus, should not be ignored