Essays on the Role of Information in Health Economics

This dissertation is comprised of essays on the role of information in health economics. In the first chapter, I study quality ratings. Ratings provide consumers with useful quality information, however, when ratings shift demand to highly-rated sellers, congestion might occur at the top of the quality distribution. Congestion caused by disclosure may be observed in the health care setting, where prices often cannot adjust to reflect varying quality. I study the trade-off between providing quality information for consumers and congestion using a star rating disclosure policy implemented at a large integrated health system in the United States, which requires every physician to have star ratings posted online in a standardized fashion. I identify the effects of physician star ratings on patient volume using a regression discontinuity and difference-in-discontinuity design which leverages the rounding of ratings to discrete values and the fact that I observe ratings before and after their public disclosure online. I find that an increase in a physician\u27s rating increases the number of new patients seen by 2.96 visits per month on a baseline of 5.48 (54% increase). I show that star ratings shift patients to physicians who more often provide medically recommended screenings, counseling, and vaccinations. However, I also show that a higher rating causes patients to wait longer for treatment. New patients wait 2.7 additional days (30.5% longer) for an additional increment of the rating scale and existing patients wait longer as well. I use these findings to compute a revealed-preference estimate of the shadow price of a star ; I find that patients are willing to wait 3 additional days in exchange for a one standard deviation increase in physician ratings. In the absence of a price, wait times may serve as an equilibrating factor to clear the market. In the second chapter, I study surprise medical bills. I introduce a model of final-offer arbitration over these bills between insurers and providers which highlights the tradeoffs for firms and policymakers