This paper exploits a brief period of asymmetric information during the implementation of Pennsylvania’s “report card” scheme for coronary artery bypass graft surgery to test for improvements in quality of care and selection of patients by health care providers.
During the first three years of the 1990s, providers in Pennsylvania had an incentive to bias report cards by selecting patients strategically, with patients having no access to the report cards. This dichotomy enables the authors to separate providers’ selection of patients from patients’ selection of providers.
Using data from the Nationwide Inpatient Sample, we estimate a non–linear difference–in– differences model and derive asymptotic standard errors. The mortality rate for bypass patients decreases by only 0.05 percentage points due to the report cards, which the authors interpret as evidence that quality of bypass surgery did not improve (at least in the short–term) nor did patient selection by providers occur. The timing, estimation, and asymptotics are readily applicable to many other report card schemes.